Overview: ArcelorMittal was disappointed with its 2Q results (Part 1 of 9)
ArcelorMittal is the largest steel maker globally with an annual capacity of 119 million tons. It has an industrial presence in 22 countries, spread across four continents. ArcelorMittal was formed by the merger of Mittal Steel and Arcelor in 2006. The company is based out of Luxembourg. It’s headed by Mr. Lakshmi N. Mittal, who is the CEO and chairman of the board of directors.
A leader in turnarounds
ArcelorMittal has a successful track record of turning around sick and bankrupt companies. Ever since Mr. Mittal started his steel making enterprise as PT Ispat Indo, which was incorporated in Indonesia, he has acquired several loss making and sick steel companies, turned them around, and integrated them to form the steel mammoth that we see today.
What are the key markets for ArcelorMittal?
ArcelorMittal has major operations in the developed markets of North America Free Trade Agreement (or NAFTA) and Europe, which account for more than 75% of its revenues. It also has operations in Brazil and Africa and the Commonwealth of Independent States (or ACIS). The previous chart shows ArcelorMittal’s major geographical markets.
The company also owns captive iron ore and coal mines to fulfill its raw material requirements. Last year ArcelorMittal was the fourth largest iron ore mining company globally. Going forward, we will analyze the financial performance of these segments and how each segment contributed to the overall profitability of ArcelorMittal.
It’s important to note that we’re analyzing the recently released second quarter results of ArcelorMittal (MT) and comparing its performance to other steel companies like U.S. Steel Corporation (X), Nucor Corporation (NUE), and Reliance Steel & Aluminum (RS). Investors looking for exposure to the steel industry can also consider exchange-traded funds (or ETFs) like the SPDR S&P Metals and Mining ETF (XME).
Browse this series on Market Realist:
- Part 2 - Must-know: ArcelorMittal’s 2Q results
- Part 3 - Must-know: Performance of European operations in the 2Q
- Part 4 - North American Free Trade Agreement results were disappointing
- Basic Materials Industry
- Commodity Markets
- Mittal Steel