ArcelorMittal, the world's top steel maker, said on Oct. 28 it had made money in the third quarter after a nine-month losing streak, an unexpected turnaround reflecting healthier demand and thousands of job cuts.
The company posted a three months to September net profit of 903 million dollars.
ArcelorMittal suffered a second quarter net loss of $792 million. It last posted a net profit, of $3.82 billion in third quarter 2008.
"We saw the first signs of recovery in the third quarter ... We should see a further improvement going into 2010 although the operating environment remains difficult," company head Lakshmi Mittal said.
The company said it expected to operate at 70% of capacity in the fourth quarter, having fallen to around 50% during the worst of the crisis. It said its rebound reflected the faster-than-expected implementation of urgent measures at the start of the global downturn.
Fixed costs have been slashed by $2.2 billion on an annual basis, savings that flowed in part from the elimination of 39,000 jobs in the past year -- through voluntary departures -- out of a workforce of 287,000.
Net debt, which at one point appeared to call into question the group's financial soundness, has been cut by $11 billion in the last 12 months to $21.6 billion.
Financial director Aditya Mittal said debt reduction was no longer a company priority. The group plans to boost investment to $4-5 billion in 2010 from an expected $3 billion this year, notably in emerging market countries and extraction projects.
But Lakshmi Mittal insisted that despite improvements in demand and sales price levels, the company had not yet emerged fully from the crisis. The company added that that if inventory draw-downs in the U.S. and Europe were completed, a complete recovery in those markets would likely take several years.
Uncertainty continues to surround a rebound in China, far and away the world's leading consumer and producer of steel. While Chinese demand should limit the decline in world steel consumption this year to 8.6%, according to the World Steel Association, doubts persist about the pace, scope and durability of the Chinese recovery.
Copyright Agence France-Presse, 2009
