Thursday 07 February 2019 9:31 am | Updated: Monday 03 June 2019 1:38 am

Arcelormittal forecasts steel demand growth as it posts strong 2018 results

Steelmaker Arcelormittal forecast that global steel demand will increase slightly this year as it announced boosted profits and revenue in its 2018 full-year results this morning.

The figures

Operating income was up 20.3 per cent to $6.5bn year on year and net income was $5.1bn, 12.7 per cent higher than 2017. Sales in 2018 were $76bn up from $68.7bn the previous year.

Earnings before tax, depreciation and amortisation (EBITDA) were $10.3bn in 2018, up 22 per cent on the previous year and the company proposed a dividend of $0.20 a share.

Why it matters

However, the world's largest steelmaker said it did “not perform at an optimum level operationally” last year as steel shipments were down 1.6 per cent and crude steel production fell 0.6 per cent.

Going forward the company expects global steel demand to increase by around 0.5 to one per cent this year, and said that improved operational performance would boost its steel shipments.

The company has invested in projects in Mexico and Brazil, and has made a bid for Essar Steel in order to expand into the Indian market.

What the company said

Arcelormittal chairman and chief executive Lakshmi Mittal said: “2018 was a year of positive momentum for Arcelormittal characterised by important strategic and financial progress.

“Operating in a healthy market environment, the company enjoyed a strong financial performance, delivering substantial profitability improvement. Having considerably strengthened our balance sheet in recent years, we also regained our investment grade credit rating….We did not perform at an optimum level operationally in 2018 and will seek to minimise operational disruption this year to ensure we meet our volume targets.

“Although the issue of global overcapacity persists and there are well publicised macro-economic risks, we expect further, moderate global steel demand growth this year.

“Having considerably strengthened the company in recent years, we are in a strong position to generate healthy levels of free cash and prosper through the cycle.”