ArcelorMittal Net Loss Narrows, But EBITDA Down; Stock Dips

(RTTNews) - Shares of steel giant ArcelorMittal (MT) were losing around 4 percent in the early morning trading in Amsterdam after the company reported sharp decline in first-quarter EBITDA, a key earnings metric, as sales were weak with lower prices and production. Net loss, however, narrowed from last year. The company also confirmed its forecast for annual EBITDA, which is lower than last year.

Net loss attributable to equityholders for the first quarter narrowed to $416 million or $0.23 per share from $728 million or $0.41 per share in the prior year.

Adjusted net loss was $176 million, compared to loss of $36 million in the prior year.

Operating income was $275 million as compared to $571 million last year. EBITDA also declined to $927 million from prior year's $1.378 billion.

Sales for quarter declined about 21.7 percent to $13.40 billion from last year's $17.12 billion. Sales were hurt primarily by 22.1 percent drop in average steel selling prices, 16.8 percent drop in market-priced iron ore shipments and 22.7 percent decline in iron ore reference prices.

Steel shipments of 21.5 million metric tonnes in the first quarter edged down 0.6 percent from 21.6 million metric tonnes last year, primarily due to lower shipment volumes in Brazil.

Separately, ArcelorMittal Europe reported first-quarter operating profit of 77 million euros, sharply lower than 281 million euros last year. There was a 34 percent drop in Ebitda sequentially to 328 million euros, mainly due to a 7.2 percent decline in average steel selling prices.

Looking ahead, the company continues to expect fiscal year 2016 EBITDA to be in excess of $4.5 billion, but below last year's EBITDA of $5.23 billion.

Chairman and CEO Lakshmi Mittal stated that since the second half of 2015 the firm has seen a recovery in spreads in core markets to more sustainable levels, which is expected to result in improved results in the coming quarters.

For Europe, steel demand this year is expected to remain more than 21 percent below pre-2007 levels, compared with the Nafta region where demand is forecast to be 4.6 percent below 2007 levels.

In Amsterdam, ArcelorMittal shares were trading at 4.51 euros, down 3.86 percent.