ArcelorMittal Sees Minimal Brexit Impact on its Business

By Alex MacDonald

LONDON--Steel giant ArcelorMittal (MT) said Friday it expects little impact on its business from the U.K. decision to exit the European Union.

"Our early analysis indicates that we expect only a very minimal impact on our business," the company said in a question and answer statement following its second-quarter results.

In the short term, the effect on the U.K. economy will be negative with economic growth slowing to between 0.5% to 1% in 2017 versus a previous forecast of 2.5%, it said. The U.K. accounted for less than 2% of the Luxembourg-based steelmaker's global sales.

In the European Union, Brexit should lower gross domestic product growth by 0.5%, the world's largest steelmaker said. The impact on steel demand within the bloc of 28 member states is forecast to be less than 1% or 0.5 million tons to 1.5 million tons. "We still expect steel demand to continue its slow recovery next year," the company said.

The company also said it plans to reconsider reinstating dividend payments when net debt drops to two times earnings before interest, taxes, depreciation and amortization. The net debt ratio was at 2.5 times Ebitda in the second quarter, it added.

Write to Alex MacDonald at [e-mail]

(END) Dow Jones Newswires

July 29, 2016 02:24 ET (06:24 GMT)

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