PARIS: Steel titan ArcelorMittal said Friday it has reduced its outlook for 2014 because of a lower-than-expected iron ore price, even as it reported a return to profit in the second quarter of this year.
For the first time for two years, ArcelorMittal said it produced a quarter in the black, generating $52 million in net profit in the second quarter of this year against a loss of $780 million for the same period last year.
For the full half-year, though, the overall net figure was in the red to the tune of $153 million, yet that was a big improvement from a loss of $1.1 billion a year ago.
But the underlying performance improved, since operating profit in the first half of the year rose by nearly 8.0 per cent from the equivalent figure last year.
The company, run by Indian magnate Lakshmi Mittal and based in Luxembourg, said it now expected 2014 Ebitda (earnings before interest, taxes, depreciation and amortisation) to be $7 billion (5.0 billion euros) instead of the $8 billion previously projected.
The price of shares in the group fell by 4.31 percent in early trading to 10.88 euros in an overall French market which was down 0.78 percent.
Analysts at brokers Bank of America-Merrill Lynch said the outcome was "disappointing"
The group said that the iron ore price has "been lower than anticipated," it explained in a statement outlining its half-year results.
The company said indicators looked positive for the rest of this year in Europe and the United States, which together accounted for two-thirds of shipments.
A year ago the group had issued a profits warning at the end of the first half but also said that it had reached the low point of the cycle for the steel industry in the first half.
In the second quarter of this year operating profit improved by 3.7 percent to 1.8 billion euros compared with the figure at the same time last year, and for the first six months it was up 7.7 percent to 3.5 billion euros. (AFP)