ArcelorMittal, the world's largest steel producer, has announced its financial results for both the full year and the fourth quarter ended December 31, 2008.
According to the company's release, ArcelorMittal registered a net income of $2.632 billion for the fourth quarter compared with a $3.821 billion net income for the third quarter of 2008 and with $2.435 billion for the fourth quarter of 2007. ArcelorMittal's 2008 full year net income decreased by nine percent to $9.399 billion, from $10.368 billion for 2007.
Sales totaled $22.089 billion for the last quarter of 2008, compared with $35.198 billion for third quarter of 2008 and $27.993 billion for the last quarter of 2007, while sales in 2008 were up to $124.936 billion compared with $105.216 billion in 2007.
The company reported EBITDA of $2.808 billion for the fourth quarter of 2008, showing a huge decrease compared to the $8.580 billion registered for the third quarter of 2008 and $4.847 billion for the fourth quarter of 2007. However, the company's 2008 full year EBITDA increased by 26 percent to $24.478 billion from $19.400 billion for 2007.
On the other hand, ArcelorMittal's shipments in the fourth quarter of 2008 decreased to 17.1 million mt compared with 25.6 million mt in the third quarter of 2008 and 28.0 million mt in the fourth quarter of 2007. The company's 2008 full year shipments also decreased by seven percent to 101.7 million mt from 109.7 million mt in 2007.
Commenting on the results, ArcelorMittal chairman and CEO, Mr. Lakshmi N. Mittal, said, "ArcelorMittal's generally excellent performance in 2008 was overshadowed by the considerable slowdown in the world economy in the last quarter of the year. Our scale, strength and market leadership, however, allowed us to swiftly and decisively implement a number of operational and financial measures to adapt to the changing environment. These measures have already started to yield results. The reduction of net debt is particularly pleasing, enabled by our ability to continue to generate strong free cash flow. Whilst the operating climate is likely to remain challenging for the first quarter, we are starting to see some signs of improvement."
Meanwhile, ArcelorMittal has updated its initiatives in response to the exceptional market environment. Accordingly, the company is continuing temporary production cuts in the first quarter of 2009 until inventory is reduced, is refocusing the $5 billion management gains program targeting savings of $2 billion in 2009, aims for a reduction of working capital rotation by 15-25 days during 2009, further reducing capital expenditure to $3 billion in 2009, while it will be on track to achieve its targeted $10 billion net debt reduction.
Besides, in its report the company announces refinancing of $4.8 billion of certain existing indebtedness and credit facilities maturing in 2010 and 2011 secured in principle through forward start facilities. Maturing of new facilities will be in 2012.
The company expects EBIDTA in the first quarter of 2009 to be approximately $1.0 billion due to the full impact of price declines and production cuts.