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ArcelorMittal profits hit by Ukraine war, inflation

ArcelorMittal, the world’s number-two steel maker, said on Thursday that profits fell in the second quarter, weighed down by inflation and the war in Ukraine.

The group said in a statement its performance was “overshadowed by the outbreak of war in Ukraine, where we have steel and mining operations”.

“Globally, the conflict is impacting growth and adding further inflationary pressure, which is spilling over into weakening of demand (for steel),” the group said.

In the second quarter, net profit eased by two percent to $3.9 billion.

But over the first half, ArcelorMittal’s bottom line increased by 27 percent to $8.0 billion, primarily due to a strong performance in the first three months of the year.

ArcelorMittal said steel output fell by 18 percent to 14.6 million tonnes in the period from April to June.

Second-quarter sales, on the other hand, grew by 14.5 percent to just over 22 billion euros, driven by an increase of some 30 percent in steel prices.

ArcelorMittal employs some 26,000 people in Ukraine and suspended its operation there when the war broke out.

But it said in May it would resume operations in Ukraine, even if only one of the three furnaces there has since restarted.

Looking ahead, chief executive Adity Mittal said that “despite the more uncertain global macro outlook”, the business was “well positioned to effectively manage through the cycle”.

“The long-term outlook for steel demand also remains positive, underpinned by the scale of opportunity related to the energy transition and the continuing growth of developing economies,” Mittal said.