ArcelorMittal Posts Robust Q2 Results Backed By Strong Growth Across Key Markets
ArcelorMittal (NYSE: MT) released its second-quarter results and conducted a conference call with analysts on 1st August 2018. The company reported robust results with an EBITDA of $3.07 billion, surpassing market EBITDA estimates by almost 8% and displaying a growth rate of 45% on a year-on-year (y-o-y) basis. A favorable market environment, broadly owing to the recent restrictive trade practices across the globe, aided the company’s overall performance.
ArcelorMittal reported a 16% y-o-y growth in its consolidated revenue owing to increased shipments and higher realized prices. The company reported a 1.2% y-o-y increase in its steel shipments for the quarter, benefiting from higher shipments at Brazil (+8%) and NAFTA(+7.1%) as the demand environment in these regions remained strong.
Additionally, the company’s average realized steel price for the quarter increased by 15.2% y-o-y, benefiting from higher pricing across its operating regions. Strong demand environment in the company’s Africa & Commonwealth of Independent States (ACIS) and Brazilian markets led to a double-digit growth in its average realized steel prices, whereas, restrictive trade practices, particularly those pertaining to tariffs, have boosted the domestic demand environment in the U.S. and Europe and led steel prices to strengthen in these respective regions.
Further, ArcelorMittal reported a 23% decline in its net interest expense for the quarter, as it continued to benefit from comparatively lower levels of debt. Consequently, the company maintains its focus on achieving its $6 billion target net debt level.
Based on the prevalent favorable market environment, the company’s management remains positive on the future performance of the company and has also applauded the Trump administration’s policy against unfair trade practices. The management believes that this has led to the reshaping of the global steel industry. Thus, on the basis of these latest results, we have kept our base case estimates for the company’s 2018 performance unchanged. You can make changes to our base case assumptions to arrive at your own fair price estimate for the company by using our interactive dashboard: What To Expect From ArcelorMittal In 2018?.
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