Steel Giant ArcelorMittal Swings to Loss -- Update

By Alistair MacDonald and Olivia Bugault 

ArcelorMittal, the world's largest steelmaker, swung to a loss in the second quarter and said it plans to shed about $2 billion in assets, adding that it expects the beleaguered industry to suffer a fall demand in Europe and the U.S.

The global steel industry has been hit by overcapacity and the massive gains in the price of iron ore, a central ingredient in production, after the Brumadinho tailings dam disaster curbed mining of the resource in Brazil.

Chief Financial Officer Aditya Mittal called for tougher protective measures to help Europe-based steelmakers compete against imports, but also said that U.S. tariffs on imports of the metal have pushed domestic production above demand, putting pressure on prices.

ArcelorMittal's net loss for the quarter was $447 million, compared with a profit of $1.87 billion a year earlier, as the company booked $900 million in impairments, it said.

The company, though, promised further debt reduction and asset sales of around $2 billion over the next two years. Earnings before interest, taxes, depreciation and amortization totaled $1.6 billion, ahead of a company-compiled consensus.

ArcelorMittal's shares were up 2.2% in morning trade.

Sales totaled $19.28 billion for the quarter, down from $20 billion a year earlier, the company said.

The company expects global steel demand in 2019 to grow between 0.5% and 1.5%, a half-percentage-point fall in its forecast.

Mr. Mittal said the company's debt levels were at the lowest in the company's history.

Write to Alistair MacDonald at [e-mail]

(END) Dow Jones Newswires

August 01, 2019 05:02 ET (09:02 GMT)

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