On May 11, Luxembourg-based steel giant ArcelorMittal, the world's largest steelmaker by volume and revenue, announced its financial results for the first quarter of 2011, posting a net profit in the first quarter following a record net loss in the last quarter of the previous year. Increased steel and iron ore shipments as well as higher average steel sales prices contributed to ArcelorMittal's first quarter profit.
In the given quarter, ArcelorMittal posted a net profit of $1.07 billion, up compared to the net loss of $780 million in the fourth quarter of 2010 and the net profit of $640 million in the first quarter of 2010. The company's sales revenues increased to $22.18 billion, increasing for the second quarter in a row, also up 27 percent from $17.43 billion in the same quarter last year. ArcelorMittal's earnings before interest, taxes, depreciation and amortization (EBITDA) of $2.58 billion for the first quarter were up from $1.7 billion in the same quarter of 2010 and $1.85 billion recorded in the fourth quarter of 2010.
Increase in steel and iron ore shipments
ArcelorMittal's total steel shipments for the three months ended March 31, 2011 were 22 million mt as compared with 21.1 million mt for the three months ended December 31, 2010 and 21 million mt for the three months ended March 31, 2010. The company's steel production in the first quarter rose by four percent year on year, reaching 23.5 million mt, also up nine percent over the previous quarter
On the other hand, ArcelorMittal also increased its iron ore shipments, on the back of higher iron ore production. In the January-March period of this year, ArcelorMittal's iron ore shipments amounted to 5.9 million mt, up from 5.4 million in the first quarter of 2010. However, as compared to Q4 2010, its iron ore shipments came down by 800,000 mt. The company's iron ore output in Q1 2011 increased by 1.2 million mt as compared to the first three months of 2010 to 11.8 million mt, down from 12.6 million mt in Q4 2010.
Commenting on the results, Lakshmi N. Mittal, chairman and CEO of ArcelorMittal, said, "As anticipated, we have seen a stronger start to the year, with an increase in both shipments and selling prices. This is expected to further improve in the second quarter as the underlying demand recovery continues. We remain confident that 2011 will be a stronger year than 2010."
For the second quarter of 2011, ArcelorMittal expects steel shipments to increase in line with higher capacity utilization (approximately 80 percent versus 75 percent in Q1 2011). The company also foresees average steel selling prices to rise and more than offset cost increases in Q2 2011. In the second quarter, mining production and profitability are expected to improve as compared to the first quarter.