ArcelorMittal Flat Carbon Europe Ebitda Ticks Up

By Alex MacDonald

ArcelorMittal (MT), the world's largest steelmaker, credited a combination of higher shipments and cost savings with helping its Flat Carbon Europe division record marginally higher operating earnings in the third quarter.

The Luxembourg-based producer reported earnings before interest, taxes, depreciation and amortization at its division of $193 million in the third quarter, up 1% from $191 million in the same quarter a year earlier. Steel shipments rose 12.7% on year to 6.58 million metric tons.

On a quarterly basis, ArcelorMittal's Flat Carbon Europe division saw Ebitda drop 43% from the second quarter, with steel shipments declining 6.9% on seasonal factors.

Average selling prices also fell 3.3% in the third quarter from the previous quarter.

"The operating environment continues to be challenging and our third-quarter results were impacted by the normal seasonal demand patterns, as well as a negative price-cost squeeze," said Robrecht Himpe, CEO of Flat Carbon Europe.

"We are however seeing improvement in the underlying performance of the business, due to the benefits of asset optimization and our cost-improvement program," he said.

ArcelorMittal is seeing improvement in parts of Europe as the euro-zone region emerges from recession. It said automotive sales have rebounded 5% year-on-year in September, the biggest gain since August 2011. Euro-zone manufacturing activity rose above 50 in July for the first time in two years and remains at 51.1 for September.

ArcelorMittal improved its forecast steel demand in the European Union in 2013. It now expects steel demand to drop within a range of 1.5% to 2.5% this year compared with expectations over the summer for a 2.5% drop.

-Write to Alex MacDonald at [e-mail]

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