ArcelorMittal reported better-than-expected third-quarter results, with a smaller decline in operating profit due to strong performance in Brazil, despite falling steel prices. The company’s stock rose 4.67% on the Paris Stock Exchange. EBITDA was $1.58 billion, down from $2.15 billion last year, while revenue fell to $15.2 billion. The firm remains optimistic for 2024, anticipating a 2.5% to 3% increase in global steel demand, excluding China. Capital expenditures for next year are projected between $4.5 billion and $5 billion.
ArcelorMittal Reports Stronger-than-Expected Q3 Results
By Pauline Foret and Anna Peverieri
In a recent announcement, ArcelorMittal revealed a smaller-than-anticipated drop in its operating profit for the third quarter, thanks to robust performance in Brazil, despite facing challenging market conditions characterized by declining steel prices.
At the Paris Stock Exchange, around 09:00 GMT, the company’s stock surged by 4.67%, positioning it at the forefront of the CAC40 index, which experienced a slight dip of 0.14%.
The organization posted an EBITDA (earnings before interest, taxes, depreciation, and amortization) of $1.58 billion (€1.47 billion), a decrease from $2.15 billion in the same quarter last year. Analysts had projected an EBITDA of $1.48 billion, according to the company’s consensus.
Revenue for the quarter reached $15.2 billion, down from $16.62 billion a year prior. The steel sector has been under pressure for a while due to tightening global monetary policies, reduced construction activity in Europe, and challenges in China’s real estate market. Additionally, rising interest rates in the United States are impacting demand.
Positive Outlook for 2024
Despite these challenges, ArcelorMittal remains optimistic about its 2024 outlook, indicating that demand in aggregated markets is expected to improve in the latter half of 2024 compared to the previous year.
“Overall, the medium- and long-term outlook for steel is positive, and we are confident that ArcelorMittal will continue to leverage its unique geographic presence and strong research and development capabilities to meet the needs of our shareholders,” stated Aditya Mittal, the group’s CEO.
The Luxembourg-based company anticipates a global steel demand increase of 2.5% to 3% this year, excluding China, which is the world’s largest consumer of steel.
Before the earnings were released, analyst Philib Gibbs from KeyBanc Capital Markets mentioned that while the steel industry is currently facing challenges compared to its peaks from 2021 to 2023, its performance remains “acceptable from a historical perspective.”
On the other hand, analysts at J.P. Morgan expressed a positive view on the confirmation of the 2024 outlook, noting it as a key highlight in ArcelorMittal’s announcement. They commended the company’s performance relative to the broader sector, which is grappling with declining steel prices in Europe and overcapacity in China.
“Many other European steel producers have lowered their outlooks, with a common theme of weakness and uncertainty in demand for Q4 and 2025. In this context, ArcelorMittal’s EBITDA, 6% higher than the consensus, appears solid compared to the rest of the sector, aligning with market expectations,” they indicated in their report.
As the world’s second-largest steel producer, ArcelorMittal has confirmed that its capital expenditures for 2024 will be in the range of $4.5 billion to $5.0 billion, with $1.4 billion earmarked for strategic growth investments.
(Written by Pauline Foret with Anna Peverieri, edited by Augustin Turpin)
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