ArcelorMittal SA, the world’s biggest steelmaker, said yesterday that a jump in sales and prices helped it generate a net income of US$1.7 billion in the second quarter, compared with a loss a year earlier.
That compares with a net loss of US$0.8 billion in the second quarter of last year and a profit of US$0.7 billion in the first quarter of this year.
The result also marked the fourth consecutive quarterly profit for the Luxembourg-based firm, as demand recovers in the US, Europe and other economies that are emerging from a recession triggered by the financial crisis in 2008.
Sales in the second quarter swelled to US$21.7 billion, up 43 percent from the same period last year and 16 percent from the previous quarter, due to higher volumes and prices. Steel shipments rose to 22.8 million tonnes, from 21.5 million tonnes in the first quarter.
ArcelorMittal, the world’s biggest producer, with output more than double that of its nearest rival, warned, however, that a seasonal drop in activity and higher raw material costs would push down third-quarter earnings.
“Looking ahead to Q3, the summer slowdown in Europe as well as a relative economic slowdown in China is putting a constraint on steel prices, while raw material costs continue to rise,” chief financial officer Aditya Mittal told a conference call.
ArcelorMittal also said it planned to sell its stainless steel unit, which has not done very well during the recession.
Mittal said the sell-off would not have an impact on the firm’s net debt, which fell to US$20.3 billion in the second quarter, largely due to shifting foreign exchange rates.
In Japan, Nippon Steel Corp returned to profit in the first quarter after boosting output to tap demand in Asia.
Net income in the three months ended June 30 was ¥26.8 billion (US$306 million), compared with a loss of ¥42.2 billion in the same period last year, Tokyo-based Nippon said in a statement yesterday.
The world’s No. 4 steelmaker forecast first-half profit of ¥60 billion.
Sales gained 30 percent to ¥970.6 billion in the three months ended June 30.
Nippon was cautious about the future, however, forecasting a full-year profit of ¥250 billion, versus a consensus forecast of about ¥316 billion in a poll of 17 analysts by Thomson Reuters I/B/E/S.
Nippon also said it would form a technical alliance with Australia’s BlueScope Steel Ltd for coated steel products for the building and construction markets, its latest move to boost sales overseas.
Steelmakers in Japan are targeting sales in Asia, including China and India, to counter slower domestic demand. JFE Holdings Inc, the nation’s No. 2 mill, on Tuesday agreed to buy a 14.99 percent stake in JSW Steel Ltd to benefit from rising demand in India.
JFE Holdings forecast its net income would rise 2.6 times to ¥120 billion for the year ending March 31, aided by a demand recovery.
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