“ArcelorMittal, the world’s biggest steelmaker, said it expects an earnings recovery in 2013 after posting the lowest quarterly profit in three years as the European debt crisis eroded demand for the metal.
Earnings before interest, taxes, depreciation and amortization fell to $1.32 billion in the fourth quarter from $1.71 billion a year earlier, ArcelorMittal said today in a statement. That beat the $1.25 billion median estimate of 18 analysts surveyed by Bloomberg. The company said 2013 Ebitda will exceed last year’s $7.1 billion as it ships more steel.
“Although we expect the challenges to continue in 2013, largely due to the fragility of the European economy, we have recently seen some more positive indicators,” Lakshmi Mittal, chief executive officer of the Luxembourg-based company, said in the statement. These will “support an improvement in the profitability of our steel business this year.”
ArcelorMittal will report 2013 Ebitda of $8 billion, according to the mean estimate of 30 analysts. Aditya Mittal, chief financial officer, wouldn’t comment on those projections on a call with reporters.
Steel-industry earnings have slumped as Europe’s economic crisis saps demand and slower Chinese growth weighs on commodity prices. European steelmakers are grappling with excess capacity that’s pushing down prices as operating costs climb. The region has capacity to make about 210 million metric tons of steel a year, while demand in a “normal market” is 150 million to 160 million tons, according to industry lobby group Eurofer.
