ArcelorMittal loses $400 million in first quarter 2016

“Our results for the first quarter reflect the very tough operating conditions in the second half of 2015,” CEO Lakshmi Mittal said. “Since that time we have seen a recovery in spreads in our core markets to more sustainable levels, which is expected to result in improved results in the coming quarters.”

Mittal said the recovery in spreads was a welcome development, although given the levels of excess capacity in China the market remains fragile and the company must be vigilant and active against the threat of unfair trade.

The company said it’s moving forward with plans to streamline its U.S. operations. ArcelorMittal expects $4.5 billion in revenue this year, and the improving market conditions to be reflected in the financial results during the second half of the year, though it projects steel demand won’t rise by more than 0.5 percent this year.

ArcelorMittal steel shipments totaled 21.5 million tons in the first quarter, an 8.8 percent increase over the previous quarter. But the company’s earnings before interest, taxation, depreciation and amortization, or EBITDA, declined by 15.9 percent because weak steel prices lingers.

ArcelorMittal now has $17.3 billion in debt, as compared to $15.7 billion at the end of 2015. But that’s because a seasonal capital investment and debt should fall to $13.3 billion as a result of the sale of the company’s stake in Gestamp.

“Following the successful completion of the $3.2 billion rights issue, the company has a sector-leading balance sheet,” Mittal said. “Our priority now is to improve the structural earnings capability of the group through our five year strategic plan, Action 2020, which will drive significant improvements in both EBITDA and cash-flow over the longer-term.”