ArcelorMittal's first-quarter profit plunged to $414 million, down more than 65% from the $1.19 billion the company made during the same period a year ago.
The Luxembourg-based steelmaker, which employs more than 10,000 steelworkers across the Region, earned $0.41 per share in the first quarter, down from $1.18 the previous quarter and $1.17 a year ago.
"Our first quarter results reflect the challenging operating environment the industry has faced in recent months," ArcelorMittal Chairman and CEO Lakshmi Mittal said. "Profitability has been impacted by lower steel pricing due to weaker economic activity and continued global overcapacity, as well as rising raw material costs as a result of supply-side developments in Brazil."
The multinational steelmaker, the largest in the world by volume, pulled in $769 million in operating income in the first quarter of the year, down from $1.5 billion in the first quarter of 2018 and $1 billion in the previous quarter. Sales totaled $19.188 billion, up slightly from $19.186 billion during the first quarter of last year.
"We continue to face a challenge from high levels of imports, particularly in Europe, where safeguard measures introduced by the European Commission have not been fully effective," Mittal said. "Although we are somewhat encouraged by the firmer price environment in China, this is not being reflected in Europe, where in order to adapt to the current market environment we have recently announced annualized production cuts of three million tons in our flat steel operations.
"It is important there is a level playing field to address unfair competition, and this includes a green border adjustment to ensure that imports into Europe face the same carbon costs as producers in Europe."
ArcelorMittal shipped 21.8 million tons of steel during the first three months of the year, which was up 2.2% year-over-year and 7.9% as compared to the fourth quarter of 2018.
The steelmaker's gross debt rose to $13.4 billion in the fourth quarter, up from $12.6 billion at the end of the last year. ArcelorMittal said it is working to reduce its debt load to below $7 billion.
"We remain focussed on our own initiatives to improve performance through delivery of our Action2020 plan," Mittal said. "Generating positive free cash flow, demonstrating progress in our efforts to further strengthen our balance sheet and improve shareholder returns are the priority.”