Lower prices were however offset in part by higher steel shipment volumes and improved cost performance.
ArcelorMittal Europe reported an operating profit of €77m for the first three months of the year, compared with a €465m operating loss in the previous quarter. The fourth quarter 2015 performance was significantly impacted by impairments and inventory write-downs. Comparing year-on-year, ArcelorMittal Europe reported an operating profit of €281m for the first quarter of 2015.
The Europe segment’s crude steel production for Q1 2016 rose 11.9% to 11.2 million tonnes, compared with the previous three months. Sales also rose, by 0.6% to €6.5bn, driven by a 13.7% increase in demand for flat steel products and an overall 10.3% increase in steel shipments, compared with Q4 2015.
While steel spreads have improved since the start of 2016, price rises are not expected to be visible until the second quarter.
Commenting, Aditya Mittal, CEO ArcelorMittal Europe and CFO ArcelorMittal, said:
“Today we reported a 34% drop in Ebitda, which shows the impact of low steel prices on our business - although we were able to offset some of the effect of low prices thanks to our ongoing focus on cost performance.
Today’s results also reflect improved demand for steel in Europe. Our shipments rose by more than 10% to 10.4 million tonnes in Q1 2016, compared with the final quarter of 2015. This stronger demand has led to a welcome improvement in steel spreads, in recent months – resulting in a tight market, for flat products in particular. However, the market remains highly volatile; we must remain vigilant against steel dumping in Europe, in order to ensure that steel is traded in line with WTO regulations.”
Steel demand in Europe this year is expected to remain more than 21% below pre-2007 levels, compared with the Nafta region where demand is forecast to be 4.6% below 2007 levels (see chart, below).
ArcelorMittal Europe has announced its results for the first quarter of 2016, reporting a 34% drop in Ebitda to €328m compared with Q4 2015, mainly due to a 7.2% decline in average steel selling prices for the first three months of 2016.
In terms of the economic outlook, ArcelorMittal sees the modest European economic recovery is continuing, supported by ECB stimulus, low oil prices and rising employment. Real steel consumption (RSC) is expected to grow by almost 2% in 2016, but apparent steel consumption (ASC) in Europe is expected to rise by only 1% after high imports pushed ASC up by 3.5% in 2015. EU28 construction is picking-up this year, while car sales are growing to levels that are only 6-7% below the pre-crisis peak.
About ArcelorMittal
ArcelorMittal is one of the world’s leading integrated steel and mining companies with a presence in 60 countries and primary steelmaking operations in 15 countries. It is the largest steel producer in Europe, among the largest in the Americas, and has a growing presence in Asia through its joint venture AM/NS India. ArcelorMittal sells its products to a diverse range of customers including the automotive, engineering, construction and machinery industries, and in 2023 generated revenues of $68.3 billion, produced 58.1 million metric tonnes of crude steel and, 42.0 million tonnes of iron ore. Our purpose is to produce smarter steels for people and planet. Steels made using innovative processes which use less energy, emit significantly less carbon and reduce costs. Steels that are cleaner, stronger and reusable. Steels for the renewable energy infrastructure that will support societies as they transform through this century. With steel at our core, our inventive people and an entrepreneurial culture at heart, we will support the world in making that change. ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
http://corporate.arcelormittal.com/