The world's largest steelmaker Luxembourg-based ArcelorMittal has announced that it is targeting cost cuts of $3 billion by the end of 2015. As of March this year, the company had achieved $200 million in cost improvements.
According to ArcelorMittal's financial results for the first quarter of the current year, the company reported a net loss of $345 million, compared to net profit of $92 million in the first quarter of the previous year. In the given quarter, ArcelorMittal's sales decreased by 13 percent year on year to $19.8 billion, while rising 2.3 percent compared to the previous quarter due to higher steel shipment volumes. The company's EBITDA was $1.56 billion, included $0.5 billion of gains from asset disposal and CO2 credit sales, down from $2.11 billion registered in the first quarter of 2012.
ArcelorMittal's crude steel production amounted to 22.4 million mt in the first quarter, down 1.75 percent year on year, while its iron ore production increased by 2.66 percent to 15.4 million mt, compared to the corresponding quarter of the previous year.
Meanwhile, ArcelorMittal's Flat Carbon Europe segment reported an operating loss of €43 million for the first quarter, excluding interest and tax costs. The Flat Carbon Europe segment's steel shipments for the given quarter increased to 6.9 million mt, rising by 15.7 percent quarter on quarter, benefiting from the restart of furnaces at Asturias and Dunkerque. ArcelorMittal stated that its Flat Carbon Europe segment started to see results of the efforts to reduce costs and improve efficiency, with profitability beginning to improve, adding that the economic conditions in Europe remain very challenging with a further decline in steel demand expected this year.
Regarding the 2013 outlook, ArcelorMittal expects to report EBITDA above $7.1 billion, assuming that in 2013 iron ore prices and the margin of steel prices over raw material costs are similar to the levels of 2012. EBITDA in the second quarter of 2013 is expected to be above the first quarter levels. During 2013, the steelmaker expects to spend approximately $3.5 billion on capital expenditures, of which $2.7 billion is non-growth related.