LUXEMBOURG: ArcelorMittal SA, the world s largest steelmaker said Wednesday fourth-quarter net profit grew just 2.7 percent to $2.44 billion as higher costs and stockpile sell-offs ate into strong global sales growth.
That figure fell below market expectations of $2.51 billion, based on a consensus of nine analysts surveyed by Dow Jones Newswires. In 2006, the company reported fourth quarter profit of $2.37 billion.
Sales in the three months ended Dec. 31 rose 20 percent to $27.99 billion, compared with $23.2 billion last year as China held back exports and ArcelorMittal pushed into fast-growing economies in Asia, Latin America, Eastern Europe and Russia.
Chief Executive Lakshmi Mittal said he expects earnings for the first quarter of this year to be in line with the fourth quarter as shipments go up and prices in North America, Latin America and Europe rise to cover higher iron ore and coal costs.
Europe saw rapid inventory reduction in the quarter as distributors sold off stocks instead of ordering direct from steel plants – a move which should boost demand this year. In China, higher fuel costs and booming demand at home held back massive exports to high-price markets in North America and Europe.
But the company warned that Asia, Africa and eastern Europe will see earnings fall on operating disruptions.
The final quarter slowdown came after a stellar year when ArcelorMittal saw profits surge 30 percent to $10.37 billion as customers worldwide called for more steel to construct buildings, cars and machines.
Revenue for all of 2007 was $105.22 billion, up nearly 20 percent from a year earlier when Mittal Steel Co. NV won its takeover bid for Arcelor SA, combining the No. 1 and No. 2 steelmakers to create a steel titan with some 10 percent of steel output.
ArcelorMittal spent $12.3 billion on a shopping spree last year, buying up or building new steel plants in Argentina, Brazil, China, Costa Rica, Egypt, Mexico and Poland.
The EU is currently investigating a complaint from ArcelorMittal and others that Chinese steel hurts them because it is sold illegally below cost in Europe. -AP
