What To Expect From ArcelorMittal’s Q1 Results

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Arcelor Mittal

ArcelorMittal (NYSE: MT) will release its first-quarter 2018 results and conduct a conference call with analysts on 11th May. Consensus market estimates have a mean adj-EPS estimate of $1.05 per share vis-à-vis an adj-EPS of $0.33 reported in the same period last year. Additionally, the company is expected to report an EBITDA of $2.3 billion in Q1 as per consensus estimates, 5% higher year-on-year (y-o-y). Prevalent favorable market conditions across ArcelorMittal’s key markets are expected to remain beneficial for the company throughout 2018 and result in an increased shipment volume and a higher price realization.

ArcelorMittal anticipates global steel demand (ex-China) to grow by 3% to 4% through 2018 with economic growth across regions boosting demand. The historically subdued regions, including Brazil and Africa & CIS (ACIS), are specifically expected to contribute to this growth as their economies continue to revive in 2018. An increased demand is expected to translate into higher price levels as well as increased shipment volumes in these regions, corresponding to last year, where it reported greater than 20% improvement in its realized steel price. Additionally, the company’s NAFTA region, which reported a stagnant EBITDA growth rate in 2017, is expected to display some revival in the current year on the basis of the recent favorable developments in the region with respect to the imposed trade tariffs and sanctions.

Furthermore, ArcelorMittal’s ambitious Action 2020 Plan which seeks to realize $3 billion in positive margin impact from 2016 to 2020 through a combination of cost reduction, product mix improvement, and an increased volume is expected to realize the remainder of a $1.5 billion EBITDA improvement over the next 3 years. Coupled with Action 2020, ArcelorMittal’s ongoing deleveraging initiative, which aims at reduce its net debt level to $6 billion (from its current level of $10.1 billion) is expected to result in material interest cost-savings and thus boost the company’s bottom line.

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Our key expectations for the company’s 2018 results are highlighted in our interactive dashboard. You can make changes to our assumptions to arrive at your own fair price estimate for the company by using our interactive platform.

 

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