ArcelorMittal net profit plummets 78% in Q3

Global steel giant ArcelorMittal on Thursday posted over a 78 per cent fall in its net income to $993 million for the September quarter, mainly due to low demand and higher energy costs.

The company follows January-December fiscal year.

"ArcelorMittal recorded a net income for 3Q 2022 of $993 million as compared to a net income for 2Q 2022 of $3,923 million, and a net income of $4,621 million for 3Q 2021. Sales in July-September also fell 6 per cent to $19 billion, $20.2 billion in the year-ago period, impacted primarily due to lower steel shipments," the company said.

Total steel shipments in the third quarter stood at 13.36 million tonnes (MT), lower from 14.6 MT a year ago, largely reflecting weaker demand in Europe.

Its gross debt increased to $9 billion as of September 30, 2022. It was $8.2 billion as on September 30, 2021.

ArcelorMittal Chief Executive Officer Aditya Mittal said the strong market conditions enjoyed for much of the past two years deteriorated in the third quarter as seasonally lower shipments, a reduction in exceptional price levels, destocking and higher energy costs combined to put profits under pressure.

"The business responded quickly to the changing environment, cutting higher cost capacity to manage addressable demand and reduce fixed costs, and reducing European gas consumption by 30 per cent," he said.

The short-term outlook for the industry remains uncertain. However, supported by a strong balance sheet, ArcelorMittal will continue to focus on executing its strategy to ensure its long-term sector leadership, as well as deliver sustainable investor returns.

Sharing the details of its JV company in India, ArcelorMittal said AMNS India posted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $204 million during the quarter under review against $551 million a year ago.

According to the company, the EBIDTA was down due to lower selling prices, higher coal costs and lower pellet sales contribution (following the introduction of the export duty during the prior quarter) offset in part by higher steel shipments.

The JV's crude steel production in Q3 2022 at 1.7 MT was 12.1 per cent lower compared to 1.9 MT in the third quarter of 2021 on account of maintenance.

Steel shipments at 1.6 MT were also lower than 1.8 MT in July-September 2021.