ArcelorMittal, the Luxembourg-based steel giant that operates a global research and development center in East Chicago, had its best quarter in a decade after selling off its Northwest Indiana steel mills last year.
The steelmaker made $2.3 billion in profit in the first quarter, up from $1.2 billion in the fourth quarter of last year, largely as a result of rising steel prices and improving market conditions following a downturn during the coronavirus pandemic. The company said it significantly improved its operating performance because of a recovery in demand that led to a 6.5% increase in shipments when taking ArcelorMittal's now smaller scale into account.
“The first quarter of this year has been our strongest in a decade. While this is naturally a very welcome development following a highly challenging 2020, we are mindful that Covid continues to be a health challenge across the world, especially in developing economies," CEO Aditya Mittal said. "Nowhere is this more obvious at present than in India, where we have our AM/NS India JV with Nippon Steel. Our colleagues in India are sending support wherever we can, including providing daily amounts of oxygen from our sites to local hospitals and setting up temporary medical facilities. Our thoughts are with the people of India as they strive to bring this situation under control.”
The steelmaker pulled in $3.2 billion in earnings before interest, taxes, depreciation and amortization in the first three months of the year, which was 88% higher than $1.7 billion in EBITDA in the fourth quarter. ArcelorMittal managed to reduce its debt to $11.4 billion, down from $12.3 billion at the end of last year.
"Operationally, we have had a very positive start to the year. We are seeing a continuation of the positive market dynamics of the fourth quarter and have been steadily bringing back production in-line with the demand recovery, which is supported by low inventory levels through the value chain. Our priorities for the remainder of the year and beyond are clear: to maintain a competitive cost advantage; to strategically grow through high-return projects in high-growth markets, whilst leveraging existing infrastructure to develop our iron-ore resource; to consistently return cash to shareholders via a defined capital return policy; and to lead on sustainable development.”
ArcelorMittal launched a new XCarb emissions reduction project as it seeks to produce carbon-neutral steel.
“Progress on our decarbonization journey continued with the launch of our XCarbTM initiative, our first significant step to create a market for low-carbon steel. We are already seeing an encouraging response from our customers. Looking to our wider sustainability commitments, we are very focused on improving our safety performance. Our global health and safety council has been reconfigured and tasked with implementing the changes required to drive a step change in our results," Mittal said. "We have also announced a new target to double the amount of women in management to 25% by 2030, which will ensure that we have a rich and diverse workforce ready to take full advantage of future opportunities.”
The steelmaker has worldwide manufacturing and mining operations but only has one steel mill left in the United States down in Alabama.
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