London - ArcelorMittal, the world’s largest steelmaker,
reported a 20 percent increase in annual profit on rising steel and iron ore
prices, and forecast higher demand this year.
The company decided not to reinstate its dividend and
stopped providing earnings guidance.
Earnings before interest, taxes, depreciation and
amortization rose to $6.26 billion last year, the Luxembourg-based company said
in a statement Friday. The figure beat the $6.14 billion average of 18
analysts’ estimates compiled by Bloomberg. Ebitda in the fourth quarter was $1.66
billion, 51 percent higher than a year ago.
Steelmakers’ earnings have been bolstered by a rally in
prices as Chinese stimulus stabilized the economy and policy makers around the
world pledged to back growth. European steel prices surged 82 percent last
year, while benchmark rates for iron ore and coking coal, which ArcelorMittal
also mines, almost doubled and tripled, respectively.
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ArcelorMittal has also benefited from increased efforts
to protect US and European markets from record Chinese exports that producers
have argued are at unfairly low prices. The company estimates that global steel
consumption will rise 0.5 percent to 1.5 percent this year.
The company decided not to reinstate its dividend,
preferring instead to pay down debt in an effort to return to an
investment-grade credit rating. Net debt decreased by $4.6 billion to $11.1
billion at year-end, the company said.
“EBITDA was comfortably in excess of initial expectations
and, furthermore, we have delivered on our commitment to prioritize debt
reduction, significantly strengthening our balance sheet and ending the year
with the lowest level of net debt since the creation of the company,” CEO Lakshmi
Mittal said in the statement.
The shares settled at 7.518 euros on Thursday and have
more than tripled in the past year.
BLOOMBERG