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Birthday : 06/19/1950
Place of birth : Rajasthan - India
Biography : Founder of Mittal Steel Co. NV, Lakshmi Niwas Mittal is an Indian businessperson who has been the he

ArcelorMittal Swings to Profit, Expresses Hope About Trump Policies -- 2nd Update

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02/10/2017 | 05:51am EDT
By Christopher Alessi 

FRANKFURT--Steelmaker ArcelorMittal SA said Friday it swung to a profit in the fourth quarter of 2016, while its chief executive sounded an optimistic note about 2017 and the potential impact of President Donald Trump's proposed economic policies on the company.

Net profit for the period ended Dec. 31 was $403 million, compared with a loss of $6.69 billion during the same period a year earlier.

The company returned to profitability mainly because of a lack of exceptional charges stemming from a decline in international steel prices, which caused losses in 2015.

"As we enter into 2017, I see there is a positive momentum both in the business and the market," Chief Executive Lakshmi Mittal said in an interview Friday.

Mr. Mittal noted rising steel demand in the crucial U.S. market and said Mr. Trump's promises to invest in U.S. infrastructure and manufacturing are "good for us" and would help the steel industry at large.

He also suggested the Trump administration could provide a bulwark against a glut of Chinese steel on the global market. "I hope that with Trump's new administration, strong trade actions will help to address to China's overcapacity," Mr. Mittal added.

China has flooded the world market with an excess of less expensive steel and aluminum, helping to trigger a continuing consolidation in the steel industry. The U.S. Commerce Department late last year launched an investigation into whether Chinese steelmakers are transporting steel through Vietnam to evade U.S. import tariffs.

Mr. Mittal said that impending consolidation in the industry would be "good for everyone."

Luxembourg-based ArcelorMittal said last year that it planned to team up with Italy's privately held Marcegaglia SpA to take over the ailing Ilva steel plant in Italy, which is Europe's largest single steel plant and a producer of flat-steel products. The deal, if it goes ahead, would solidify ArcelorMittal's position atop the European flat-steel market, ahead of Germany's Thyssenkrupp AG.

Thyssenkrupp is in talks to combine its steel operations with India's Tata Steel Ltd., a move Mr. Mittal said he hopes will come to fruition.

ArcelorMittal, the world's largest steelmaker, said it expects to increase capital expenditure in 2017 to $2.9 billion from $2.4 billion last year, a result of recovering steel markets. The company said it expects global apparent steel consumption to continue to expand in 2017, growing by between 0.5% and 1.5%.

The company early last year was forced to tap shareholders with a $3.1 billion rights issue to shore up its balance sheet after the slump in steel prices in 2015. That move, along with improved market conditions last year, helped it reduce its net debt to $11.06 billion at the end of 2016 from $15.68 billion in 2015.

Chief Financial Officer Aditya Mittal on a conference call with reporters Friday lauded the progress but cautioned that markets "remain volatile" largely as a result of Chinese overcapacity.

ArcelorMittal's fourth-quarter sales rose 1% to $14.1 billion as a result of higher steel shipment volumes, higher average steel selling prices and higher iron-ore reference prices. But those gains were offset by lower market-priced iron-ore shipments, the company said.

Write to Christopher Alessi at christopher.alessi@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
ARCELORMITTAL -2.38% 14.572 Delayed Quote.-19.67%
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