STEELMAKER ArcelorMittal on Wednesday said ongoing uncertainty around global tariffs could lead to further economic disruption, even as its global presence helped it remain steady in the first quarter.
The company said the US administration’s 25 per cent tariffs on aluminium and steel imports, along with broader trade measures that are still under negotiation, may affect global growth as both businesses and consumers delay purchases.
“Heightened uncertainty around the terms of global trade is hurting business confidence and risks causing further economic disruption if not quickly resolved,” said ArcelorMittal chief executive Aditya Mittal.
ArcelorMittal posted a net profit of £605 million for the first quarter, beating analyst expectations. However, this marked a 14 per cent drop compared to the same period last year. The company had reported a net loss of £293 million in the final quarter of last year.
Mittal described it as a “quarter of consistent delivery and robust margins, particularly given the geopolitical challenges”. He added, “It is encouraging... that around the world, governments are committed to supporting their domestic manufacturing industries.”
He said US tariffs “are supporting higher prices and spreads” and urged the European Union to implement agreed measures to support the region’s steel manufacturers.
During a call with analysts, chief financial officer Genuino Christino said, “It’s clear there’s now a good understanding in Europe of the challenges the steel industry faces.”
He welcomed Germany’s investment plan worth billions of pounds to “support demand”.
Asked whether ArcelorMittal might eventually exit Europe due to higher production costs compared to India or Latin America, Christino said it was too “early” to consider the issue.
The company confirmed it would invest £3.4 to £3.8 billion in efforts to decarbonise its steel production. However, it suspended a €1.8 billion (£1.5 billion) decarbonisation investment in France at the end of last year. It is also shifting some support jobs from Europe to India as part of a cost-saving plan.
Earlier this month, ArcelorMittal announced that about 600 jobs would be cut across seven sites in France, which together employ around 7,100 people.
The company confirmed its base dividend and its policy to return at least 50 per cent of post-dividend annual free cash flow to shareholders. It also recently announced additional share buybacks.
ArcelorMittal shares closed down 1.7 per cent on Wednesday, while the Amsterdam all-share index rose 0.4 per cent.
(With inputs from agencies)
