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ArcelorMittal Gains on Highest Profit in Over a Decade, More Buyback

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  • MT

By Dhirendra Tripathi

Investing.com – ADRs of ArcelorMittal (NYSE:MT) traded 4.4% higher in premarket Thursday as the steelmaker posted its highest quarterly profit since 2008 while expanding its share repurchase plan.

Booming economies and stretched supplies resulted in higher steel prices and the world’s largest steelmaker outside of China rode that to deliver $4.6 billion in net profit in the third quarter. That compared to a loss in the same period in 2020. EBITDA per ton of steel sold by ArcelorMittal, at $414, was nearly eight times what it was a year earlier.

Sales were up more than 52% at $20.22 billion.

Steel shipments fell 9% on order cancellations from clients in the automobile sector, which has cut production sharply due to a lack of semiconductors. Demand from China, the world’s largest producer and consumer of steel, was also weak, owing to troubles in the country’s real estate sector.

Arcelor said it expects global steel demand to grow by between 12% and 13% this year excluding China. It now expects a slight contraction in Chinese steel demand in 2021, due to weaker demand from the real estate sector. It had previously expected Chinese demand to grow by 3%-5%.

Chief Executive Officer Aditya Mittal expects to put production constraints and shipment delays behind in the fourth quarter. He said “underlying demand is expected to continue to improve, and, although marginally off the recent record highs, steel prices remain at elevated levels, something which will be reflected in the annual contracts for 2022.”

The company also topped its ongoing share buyback program by $1 billion. Of the $5-billion buyback announced by the company since September 2020, $1.8 billion was still outstanding before the announcement.

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