Arcelor beats H1 forecasts on merger benefits

Arcelor beats H1 forecasts on merger benefits

Arcelor recorded a 40% increase in 2004 first half core profit gaining from merger benefits and higher steel prices. First half EBITDA earnings rose to €1.8 billion ($2.16 billion) from €1.3 billion ($1.57 billion) recorded in the first half of last year, surpassing analysts' expectations of €1.6 billion ($1.93 billion). Arcelor is the result of a 3-way merger in 2002 among France's Usinor, Luxembourg's Arbed and Spain's Aceralia. Revenues increased 7.4% to €14.6 billion ($17.62 billion) and the company's net profit climbed 141% to €865 million ($1.04 billion). However, the company has warned that second half profits may be negatively affected by high raw materials and logistics prices, as freight rates, coke, scrap, and nickel prices are on the rise again. According to Arcelor's CEO Guy Dolle, the company's steel price hikes have, on average, only compensated for much higher raw material costs, but the company is now announcing significant price increases for the third quarter of 2004 to counter rising costs and close the gap with higher international prices for steel.