Huge profits for ArcelorMittal as recovery fuels demand
ArcelorMittal is having its most profitable year since the 2008 financial crisis and expects even better months ahead with Europe's manufacturing and residential construction sectors surpassing pre-crisis levels, the company said on Thursday.
Profits of $6.3 billion (€5.3 billion) in the first half of the year were the best for ArcelorMittal since 2008, and things should stay rosy for the rest of 2021, the company said, during the publication of its latest financial results.
Humming machine-builders, construction sites and even auto factories are likely to increase steel demand within the European Union by up to 15% this year, the firm predicts, more than making up for last year's 10% fall due to pandemic shutdowns.
Huge and widespread demand for steel has left the company unable to keep up with deliveries despite prices that have even doubled for some products since the economic rebound started late last year in Europe, ArcelorMittal's biggest market, the company said.
"Our performance is clearly very welcome after the unprecedented disruption the business and our people faced in 2020", Chief Executive Officer Aditya Mittal said in a statement.
Pandemic-induced factory closings and a drive to reduce debt and overhead costs led ArcelorMittal to cut nearly 590 positions in Luxembourg over the next five years through early retirement and other incentives. The deal with unions and Prime Minister Xavier Bettel's government included a plan for the company to also pledge investments of between €165 million and €205 million in upgrades at its three Luxembourg mills.
Until last year the world's biggest steelmaker for nearly two decades, ArcelorMittal now expects global steel demand to increase by up to 8.5% from last year. In May, the company projected the key barometer of economic growth to expand by about 5%.
Prospects for the remainder of this year are so good the company announced it was bringing forward a $1 billion (€842 million) payout to shareholders originally planned for next year, which is instead due to be distributed by the end of 2021, ArcelorMittal said. That's on top of a $1.2 billion (€1 billion) share buyback plan on track to close this year, the company added.