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ArcelorMittal Issues EUR600M Notes

Zacks Equity Research

Steel giant, ArcelorMittal (MT) announced that it has completed the issuance of €600 million ($680 million) 2.875% Notes under the €3 billion (roughly $4 billion) wholesale Euro Medium Term Notes Programme (“EMTN”). The proceeds from the issuance will be utilized for general corporate purposes.

ArcelorMittal posted a net loss of $0.2 billion or 12 cents per share in first-quarter 2014, narrower than a net loss of $0.3 billion or 21 cents a year ago.

Revenues inched up 0.2% year over year to $19.8 billion in the reported quarter. Sales were almost unchanged from the prior quarter as improved steel shipments were partly offset by lower average steel selling prices, seasonally lower market priced iron ore shipments and lower iron ore reference prices. Steel shipments rose 2.4% year over year to 21 million metric tons.

ArcelorMittal reaffirmed its projection for earnings before interest, taxes, depreciation and amortization (:EBITDA) of about $8 billion for 2014. The company expects a recovery in the U.S. and Europe to aid its results this year. It forecasts net interest expense to be roughly $1.6 billion in 2014, down from $1.8 billion in 2013, mainly due to lower average debt.
As part of its management gain improvement target of $3 billion by the end of next year, the company has set action plans and detailed targets for its various business units.

ArcelorMittal currently has a Zacks Rank #3 (Hold).

Other companies in the steel industry with a favorable Zacks Rank include Grupo Simec S.A.B. de C.V. (SIM), Universal Stainless & Alloy Products Inc. (USAP) and ThyssenKrupp AG (TYEKF). While Grupo Simec and Universal Stainless & Alloy Products sport a Zacks Rank #1 (Strong Buy), ThyssenKrupp carries a Zacks Rank #2 (Buy).

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