ArcelorMittal profit fell 25 percent to $900 million in the third quarter, bringing its total profit to $4 billion through the first nine months of the year
The Luxembourg-based steelmaker's net income was down from $1.2 billion during the third quarter of 2017 and from $1.9 billion during the previous quarter.
“As anticipated, market conditions in the third quarter remained favorable, resulting in significantly improved EBITDA for the first nine months compared with 2017. We continue to see robust real demand and healthy utilization rates across all steel segments," ArcelorMittal Chairman and CEO Lakshmi Mittal said. “We continue to make good progress with the implementation of our Action 2020 plan, which will improve the performance of our existing business and target further growth in higher added-value products. We are also expanding our business through the execution of a targeted and disciplined strategy to create long-term value."
ArcelorMittal pulled in EBITDA — earnings before interest, taxes, depreciation and amortization — of $2.7 billion in the third quarter, an 11.2 percent decline as compared to the second quarter. That was largely because of a 5.5 percent drop in steel shipments, to 20.4 million tons.
The company's steel production rose 0.5 percent to 23.3 million tons in the third quarter. ArcelorMittal now has $13 billion worth of gross debt, but its net debt is $1.5 billion lower than a year ago.
“The progress the industry and our company has made is significant but we remain cognizant of the challenges, including continued global overcapacity, and we remain concerned with the high level of imports in various markets," Mittal said. "We continue to prioritize net debt reduction and a strong balance sheet to ensure we can prosper in all market conditions.”
ArcelerMittal USA was profitable last quarter and steelworkers in Northwest Indiana will get profit-sharing bonuses, but the company could not immediately say how much.
"ArcelorMittal USA benefited from a strong pricing environment throughout Q3, as the domestic steel market continues to benefit from Section 232 trade measures, enabling us to continue the favorable financial performance we achieved in Q2 2018," ArcelorMittal USA CEO John Brett said. "However, like many business units throughout the ArcelorMittal Group, ArcelorMittal USA missed business plan targets for volume. Steel shipments for Q3 2018 were 3.22 million net tons, six percent short of business plan and down 7.5 percent from Q2 2018. The missed projections for both production and shipments were due to softening demand, reliability and delivery performance. ArcelorMittal USA is identifying and implementing action plans to address unplanned stoppages, increase productivity and drive better overall performance."
ArcelorMittal and the United Steelworkers union have been trying to negotiate a new contract, with the company most recently offering the 14 percent in raises and $4,000 in signing bonuses that U.S. Steel did.
"We look forward to reaching a mutually beneficial agreement with the United Steelworkers and extend our appreciation to our workforce and customers for their patience during this process," Brett said. "As we move forward, our focus remains on capitalizing on the current pricing environment by producing and shipping more steel through improved reliability and delivery efforts."