ArcelorMittal sees H1 pick up, concern on Europe

By Philip Blenkinsop

BRUSSELS (Reuters) – ArcelorMittal (ISPA.AS: Quote, Profile, Research, Stock Buzz), the world’s largest steelmaker, forecast an improvement in the first half of 2012 from a weak end to last year, with a clear pick up in North America but still concerns about Europe.

The company, which makes around 7 percent of global steel, said on Tuesday steel shipments would return to the level seen at the start of last year and its mining output would continue to grow.

Prices were recovering, but still below year-ago levels.

Core profit (EBITDA) in the first six months would be lower than a year earlier, but above the level in the second half of 2011, ArcelorMittal said.

“We see an increase in shipments and in prices in Q1 both in Europe and the United States and so the steel market is better than in the second half of 2011,” Chief Financial Officer Aditya Mittal said.

“The economic situation in Europe does remain a live concern, but we are seeing an improvement in sentiment compared with the fourth quarter,” he said on a conference call.

Mittal said global steel demand was expected to rise by 4.6 percent this year, with a contraction of 1.3 percent in Europe, 5.5 percent growth in North America and expansion of 5.2 percent in China and 5.6 percent in the rest of the world.

ArcelorMittal shares were up 1.8 percent to 16.45 euros at 0855 GMT, against a 0.9 percent drop of the STOXX European basic resources index .

Analysts said they were encouraged the company had met its target of reducing net debt to $22.5 billion six months ahead of schedule and were cautiously positive on its outlook.

“Shipments, the same level as in the first half of 2011 is a pretty decent level. Their assessment of demand seems fairly upbeat,” said Neil Sampat of Nomura, adding the market should be comfortable with ArcelorMittal hitting full-year consensus numbers.

EUROPE FROM ‘CRISIS’ TO ‘RECESSION’

Aditya Mittal said sentiment in Europe, where ArcelorMittal sells almost half of its steel, had at least improved from a “crisis” situation to a “recessionary environment.”

Reflecting the regional split, the world’s largest steelmaker has idled nine of its 25 blast furnaces in Europe, but none in North America.

The company said core profit in the fourth quarter fell 29 percent to $1.71 billion, roughly in line with the average forecast in a Reuters poll.

However, it did slip into an unexpected loss — of $1 billion — in the quarter, due to impairment and restructuring charges for idling European operations and a big tax hit.

Iron ore production rose 10 percent and coal output by 20 percent in 2011. It has set a growth target of 10 percent for each this year.

(Additional reporting by Eric Holmberg, editing by Mark Potter)

http://www.reuters.com/article/2012/02/07/us-arcelormittal-idUSTRE8160DL20120207

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