Profits at steelmaker Arcelor soar six-fold

15th November 2004, Comments 0 comments

PARIS, Nov 15 (AFP) - European steelmaker Arcelor said Monday that net profit in the third quarter surged by more than sixfold and forecast a strong fourth quarter amid 'healthy' growth in the global steel market, driven by Chinese demand.

PARIS, Nov 15 (AFP) - European steelmaker Arcelor said Monday that net profit in the third quarter surged by more than sixfold and forecast a strong fourth quarter amid 'healthy' growth in the global steel market, driven by Chinese demand.

The group said net profit soared to EUR 629 million (USD 817 million dollars) from EUR 101 million 12 months earlier, beating analysts' forecasts in a range of EUR 461-600 million euros.

The result brought earnings per shares to 1.09 euros in the quarter, up from 0.21 a year earlier.

Gross operating profit jumped to EUR 1.098 billion, up from 416 million a year earlier and at the top end of analysts forecasts averaging EUR 1.064 billion.

The result gave a gross margin of 15.35 percent, more than double the 7.09 percent registered 12 months earlier.

Third-quarter sales grew 21.9 percent to EUR 7.152 billion from 5.869 billion in the third quarter of 2003, boosted by higher average selling prices for steel since July, notably flat carbon, and on increase volumes compared to a low base period.

Arcelor attributed the improvement in its results to growth in long carbon steel and the distribution sector and continued strong demand in China.

Net debt at end-September stood at EUR 2.372 million, down from 3.527 billion at end-June.

Looking ahead, chief executive Guy Dolle told AFP in a telephone interview: "The fourth quarter will be an excellent quarter. In any case, I see no reason why it would be less good that the third."

The company forecast a new round of price increases on the back of further rises in raw materials costs.

Arcelor said economic growth "remains sustained" and "while some adjustments have been observed in Asia", demand in China was still strong.

It said consumption was expected to continue to grow during the next months and inventory levels were "normal".

Spot selling prices for flat carbon steels in Europe were still lower than those achieved in North America despite price increases for the third quarter that aimed at aligning European prices to world levels. The gap between prices in the two regions was currently narrowing.

Arcelor warned that raw material and freight costs are expected to increase further from current "very high levels", but that it expected to pass these increases on after long-term contract renegotiations with clients in the auto, packaging and appliances sectors.

© AFP

Subject: French News

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