ArcelorMittal, the biggest steelmaker globally, report a $447 million loss in its second quarter. The Steel Giant also plans to shed approximately $2 billion in assets, adding that it expects the struggling industry to experience a fall in demand from Europe and the United States.
ArcelorMittal, the global steel giant, recently reported a net loss of $447 million for the quarter of June 2019. The reported loss comes majorly as a result of higher fees on raw materials and the low prices of steel.
The global steel business has been hit by a variety of challenges, including the massive gains recorded from the price of iron ore, an essential production element. The excess numbers marked comes after the Brumadinho tailings the dam disaster that limited Brazil's mining capabilities.
Aditya Mittal, Chief Financial Officer at ArcelorMittal, in recent times calls for better protective measures to aid European based steelmakers primarily to compete against foreign importations. But also noted the United States tariffs on metal importations had pushed local production above average demand, thus hitting more pressure on the price.
The statement posted by Aditya Mittal reported a "total loss of $447 million in the second quarter of 2019".
A year ago, ArcelorMittal had forwarded a total income of $1.87 billion, which it attributes to its equity holders. The net loss of $447 million for this quarter, in comparison to the $1.87 billion profit in 2018, has booked the firm a $900 million in damages.
"For this quarter, total sales of $19.28 billion was recorded, down from $20 billion in 2018", the firm said.
"a $13.8 billion gross debt was recorded at June-end this year" the company added.
But ArcelorMittal uses a January-December financial calendar, which shows a notable increase from sales amounting to $19.3 billion all through this quarter as in contrast to $19.2 billion in the 2018 period, recording a 0.5% marginal rise. Earnings before amortization, depreciation, interest, and taxes add up to $1.6 billion, a bit more than the company-compiled consensus.
Remarks on the outcomes from Lakshmi N Mittal, ArcelorMittal CEO, and Chairman says after a positive 2018, 2019 market situations within the first half have been difficult. He added that the profitability usually recorded in the steel segments is in anguish. Also, the ensuing form lower prices of steel in addition to the higher costs experienced in purchasing raw material.
These factors pointed by Mr. Mittal has slightly reduced due to the partial offset coming from improved profitability currently been experienced in our mining section. ArcelorMittal is presently generating a steady free flow of cash to demonstrates its enhanced robustness in line with the business decisions resulting from its plan for Action 2020.
Mr., Mittal also added that "worldwide overcapacity still lingers as a clear issue. With our reduction in capacity for Europe market is in reply to the present weak demand setting, which has similarly spread its effect to the effectiveness of Italy's ex-Ilva facilities."
"Additional action may be required to be acted on in addressing the growing level of importations coming into the continent owing to futile safety measures." And
"ArcelorMittal remains to involve the European Commission in creating a level playground for the steel industry," he noted.
Taking a positive viewpoint for the upcoming second half of 2019, ArcelorMittal says,
"it is expecting global demand of steel in 2019 growth by 0.5% - 1.5% (ex- demand for steel growth in China +0.5% to +1.0 %; US +0 % to +1.0 %; and Europe to contract by the range of -2.0% to -1.0 %)".
ArcelorMittal's shares faced a positive growth in trade over the last days. Mr. Mittal also notes the firm's debt levels were at its record lowest. Nevertheless, ArcelorMittal promises a further debt drop and asset sales of approximately $2 billion over the coming years.