ArcelorMittal raises buybacks by another $1bn as profit soars
The world’s largest steelmaker posts a sixfold rise in Q3 profit, but expects demand from China to slow
Brussels — ArcelorMittal, the world's largest steelmaker, said on Thursday it was increasing its share buyback programme by another $1bn after reporting its strongest quarter in more than a decade.
The uplift brings the capital returns announced by the company since September 2020 to $6bn. There is now $1.8bn outstanding on its buyback programme. ArcelorMittal said it expects global steel demand to grow by between 12% and 13% in 2021 excluding China, where real demand has weakened.
It now expects a slight contraction in Chinese steel demand in 2021, citing the country’s real estate sector.
Shares were up 3.93% to €28.43 on Thursday.
Third-quarter earnings before interest, tax, depreciation and amortisation (ebitda), the figure most watched by the market, showed about a sixfold increase from the same period in 2020 at $6.06bn.
That was slightly below the average forecast of $6.15bn returned by a company poll.
“Our third-quarter results were supported by the continuing strong price environment, resulting in the highest net income and lowest net debt since 2008,” CEO Aditya Mittal said in a statement.
It was the strongest quarter since 2008 and up 19.9% from the previous three-month period, the company added.
“This was on the back of strong steel price increases and steel spreads, offset by 9% lower volumes due to a combination of automotive order cancellations, shipment delays and production curtailments given higher energy prices,” ING analyst Stijn Demeester wrote in a note.
The group said net debt declined to $3.9bn, the lowest since 2006 and down from $5bn at the end of the previous quarter.
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