ArcelorMittal Keeps Positive Steel-Demand Outlook After Earnings Beat Expectations — Update

By Pierre Bertrand

ArcelorMittal maintained its 2024 steel-demand growth expectations after volumes and prices in the first three months of the year improved and earnings exceeded expectations.

The Luxembourg-based steelmaker, which faced protracted weak demand and construction activity last year, said Thursday that it continued to expect apparent steel consumption excluding China to grow by 3% to 4%, including growth in the U.S. and in Europe, but that the overall economic sentiment remained subdued.

It added that customers were keeping what it said was a wait-and-see approach and that there were yet no apparent signs of a restock to inventories.

"Nevertheless, sentiment appears to have reached a floor and given the low inventory environment (particularly Europe) as soon as real demand begins to gradually improve, apparent demand is expected to rebound," the company said.

ArcelorMittal, which agreed in March to become the largest shareholder in French steel product manufacturer Vallourec, said crude steel production remained largely flat on year at 14.4 million metric tons compared with 14.5 million tons in the first quarter of 2023.

Steel shipments, which reached 13.5 million tons in the quarter, declined slightly on year from 14.5 million tons.

Crude steel production, as well as steel shipments in the quarter improved, however, when compared with the last quarter of last year, the company said.

Average steel selling prices in the quarter rose 4.8% and steel shipment volumes improved by 1.4% compared with the last quarter of last year, which supported the company's earnings, it said.

Earnings before interest taxes depreciation and amortization came at $1.96 billion in the first quarter, an 8.6% on year decrease, but a 35% increase when compared with the 4Q 2023, driven by improvement in North America, Brazil, Europe and India, the company said.

ArcelorMittal said it made $938 million in net profit for the quarter compared with $1.1 billion a year ago, on revenue that fell 12% to $16.28 billion. The result was, however, a sequential improvement when compared with 4Q of 2023.

Analysts had expected $733 million in net profit and Ebitda of $1.81 billion, according to a company-provided consensus.

As previously disclosed, ArcelorMittal said it still expects apparent steel consumption to grow 1.5% to 3.5% in the U.S., 2% to 4% in Europe, 0.5% to 2.5% in Brazil and 6.5% to 8.5% in India, the company said.

ArcelorMittal maintained its capital expenditure forecast in the $4.5 billion to $5 billion range for the year.

Write to Pierre Bertrand at pierre.bertrand@wsj.com

(END) Dow Jones Newswires

May 02, 2024 04:04 ET (08:04 GMT)

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