ArcelorMittal today said its net loss narrowed down to USD 416 million (about Rs 2,766 crore) in the quarter ended March 31, but the steel giant reported a rise in debt to USD 17.3 billion during the period.
The firm led by billionaire Lakshmi Mittal had posted a net loss of USD 728 million in the year-ago period and USD 6.7 billion for October-December, it said in a filing.
Net sales of the world’s largest steel producer fell by 22 percent to USD 13.4 billion in January-March from USD 17.1 billion last year.
ArcelorMittal follows January-December fiscal year.
The Luxembourg-based firm, however, reported a higher net debt of USD 17.3 billion as against USS 15.7 billion in December, largely due to seasonal working capital investment (USD 1.2 billion) and forex (USD 0.5 billion).
ArcelorMittal’s Chairman and CEO Lakshmi Mittal said: “Our results for the first quarter reflect the very tough operating conditions in the second half of 2015.
“Since that time we have seen a recovery in spreads in our core markets to more sustainable levels, which is expected to result in improved results in the coming quarters.” This is a welcome development, although given the levels of excess capacity in China, the market remains fragile and the firm must continue to be vigilant and active against the threat of unfair trade, he added.
“Following the successful completion of USD 3.2 billion rights issue, the company has a sector-leading balance sheet.
Our priority now is to improve the structural earnings capability of the group through our five-year strategic plan, Action 2020,” Mittal said.
The Action Plan 2020 will drive significant improvements in both EBITDA and cash-flow of the firm over the long term, he added.
ArcelorMittal also reported steel shipments of 21.5 million tonnes (MT) in the first quarter of 2016, marginally lower from 21.6 MT in the year-ago period.
Iron ore shipments fell 17 percent in January-March to 7.8 MT from 9.4 MT in the same period last year. Crude steel production fell 2.1 percent to 23.2 MT from 23.7 MT during the quarter under review.
On outlook, the firm said: “The impact of the improving steel spread environment is expected to be fully reflected in the results of the second half of the year.” Improving market conditions are likely to consume working capital in 2016 (current estimate of about USD 0.5 billion); the Company nevertheless, expects to be free cash flow positive in 2016, it added.