Steel major ArcelorMittal (MT) Wednesday reported a profit for the fourth quarter of fiscal 2009 compared with a loss last year, which included heavy inventory write-downs. Sales were down year-over-year, reflecting lower sales across all segments except Asia Africa and CIS. The company also provided an EBITDA outlook for the first quarter.
The world's biggest steel maker's fourth-quarter net income attributable to owners of the parent was US$1.07 billion or US$0.68 per share, compared to a net loss attributable to owners of the parent of US$2.63 billion or US$1.93 per share last year. In the prior quarter, the company earned US$0.9 billion or US$0.60 per share.
On average, five analysts polled by Thomson Reuters expected the company to report earnings of US$0.27 per share for the fourth quarter. Analysts' estimates typically exclude special items. ArcelorMittal stated that its fourth-quarter operating performance was positively impacted by an exceptional gain of US$380 million relating to a reversal of litigation provisions previously booked in the fourth quarter of 2008, and a net gain of US$108 million recorded on the sale of carbon dioxide credits that the company purchased since 2007. These carbon dioxide proceeds will be re-invested in energy saving projects.
Included in the year-ago quarter was a loss of US$4.44 billion related to write-downs of inventory and raw material supply contracts, and provisions for workforce reduction and litigation.
Income from equity method investments and other income was a gain of US$101 million, compared with gains of $386 million in the prior-year quarter.
ArcelorMittal's quarterly sales declined to US$18.64 billion from US$22.09 billion in the same quarter a year earlier. Despite the improvement in demand during the fourth quarter of 2009, sales remained substantially lower year-on-year due to the global economic crisis, the company said. Four analysts had a consensus revenue estimate of US$19.01 billion for the quarter. For the preceding third quarter, the company's sales were US$16.17 billion.
Total steel shipments rose to 20 million metric tonnes from 17.1 million metric tonnes in the previous year, helped by improved demand across all segments. Average selling prices were lower across all business segments.
Based on segments, Flat Carbon Americas generated sales of US$4.07 billion, down from US$4.54 billion a year ago. Crude steel production reached 5.4 million tonnes, higher than last year's 3.47 million. Steel Shipments were 4.83 million tonnes, up from 3.93 million tonnes a year ago.
Flat Carbon Europe reported quarterly sales of US$5.93 billion, compared with US$7.03 billion in the previous year quarter. Crude steel production reached 7.41 million tonnes, higher than 5.15 million tonnes in the fourth quarter of 2008. Steel shipments grew to 6.41 million tonnes from 6.02 million tonnes a year earlier.
Long Carbon Americas and Europe recorded fourth-quarter sales of US$4.58 billion, versus US$5.18 billion in the year-ago quarter. Crude steel production increased to 5.36 million tonnes from 3.74 million tonnes last year. Steel shipments reached 5.23 million tonnes, up from 4.55 million tonnes a year earlier.
Asia Africa and CIS, or AACIS, reported fourth-quarter sales of US$2.27 billion, an upside from US$2.07 billion last year. Crude steel production rose to 3.9 million tonnes from 2.13 million tonnes in the previous year, while steel shipments reached 3.08 million tonnes, higher than 2.19 million tonnes a year earlier.
Stainless Steel sales declined to US$1.25 billion in the fourth quarter from US$1.32 billion last year. Crude steel production was 0.45 million tonnes, compared with 0.38 million tonnes in the prior-year quarter. Steel shipments grew to 0.42 million tonnes from last year's 0.37 million tonnes.
Steel Solutions and Services generated sales of US$3.49 billion, in comparison with US$4.31 billion a year ago. Steel shipments were 4.17 million tonnes, up from 3.68 million tonnes in the same quarter of fiscal 2008.
For fiscal 2009, ArcelorMittal reported a net income attributable to the owners of the parent of US$118 million or US$0.08 per share, compared with US$9.4 billion or US$6.78 per share a year earlier. Full-year sales totaled US$65.11 billion, sharply lower than US$124.94 billion in the previous year. Wall Street analysts projected a loss of US$0.67 per share for the year on revenues of US$67.98 billion.
ArcelorMittal also said its Board of Directors has recommended to maintain the company's base dividend at US$0.75 for full-year 2010. The dividend payments would occur on a quarterly basis for the full year 2010, on March 15, June 14, September 13, and December 15. The first-quarter dividend to be paid on March 15 shall be an interim dividend.
Looking forward, ArcelorMittal expects first-quarter 2010 EBITDA of approximately US$1.8 billion to US$2.2 billion. Shipments are expected to be higher during the first quarter compared with the fourth quarter of 2009. However, this increase is expected to be offset by slightly lower average selling prices and increased costs. The company also expects net debt to increase in the first quarter of 2010.
Amongst peers, United States Steel Corp. (X) has reported a net loss for the fourth quarter over a profit last year, hurt by lower average realized price and weak steel shipments. The company's net loss was $267 million or $1.86 per share, compared to a net income of $290 million or $2.50 per share in the prior-year quarter. Net sales decreased to $3.35 billion from $4.50 billion last year. US Steel has said that business conditions are gradually improving as the U.S. and global economies are in the early stages of a gradual recovery.
MT closed Tuesday's trading at $39.46 on the NYSE, up $1.86, on a volume of 5.44 million shares.
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