ArcelorMittal Q3 net sales up 38% yoy to US$35.2bn. EBITDA of US$8.6bn, up 76% compared with Q307. ArcelorMittal, the world’s leading steel company, has announced results for the three and nine-month periods ended September 30, 2008. Highlights for the three months ended September 30, 2008: Sales of US$35.2bn, up 38% compared with Q307….

EBITDA of US$8.6bn, up 76% compared with Q307

Net income of US$3.8bn, up 29% as compared with Q307

Capital expenditures of US$1.8bn in Q308

Total return to ArcelorMittal shareholders of US$2.3bn, of which US$0.5bn in cash dividends paid and US$1.8bn in share buy-backs
Base dividend to be maintained at US$1.50 per share for 2009

Guidance:

Q408 EBITDA guidance to be in the range of US$2.5 – US$3.0bn
On track to deliver full year EBITDA of US$24.2 – US$24.7bn compared with 2007 full year EBITDA of US$19.4bn

The company also announced initiatives in response to the current economic environment:

Adaptation of existing growth plan to reflect market conditions
Increased management gains target from US$4bn to US$5bn through additional selling, general and administrative (SG&A) savings over the next five years Increase of temporary production cuts to accelerate inventory reduction Targeting US$10bn net debt3 reduction by end of 2009 to increase financial flexibility

EBITDA which is defined as operating income plus depreciation and impairment expenses, and also excludes the accounting effects of the new labor contract.

During the third quarter 2008, ArcelorMittal USA agreed to a new four year labor contract with its union employees. Management has concluded that under IFRS it is required to recognize a non-recurring expense in the third quarter of approximately US$1.6bn primarily related to vested post-employment benefits. In addition it was agreed to pay an additional US$90mn upon signing of the contract. Under US GAAP a significant portion of this expense would have been recognized over a number of years.

“We have announced today strong results for the quarter with EBITDA of US$8.6bn. Looking forward, we have also announced necessary and responsible measures to ensure we are well adapted to the current environment. Our focus remains on cost-leadership and service to customers. The current period of de-stocking requires that we make appropriate production cuts to seek to rebalance supply and demand, and we are also accelerating efforts to pay down debt,” said Lakshmi N. Mittal, Chairman and CEO, ArcelorMittal.

“ArcelorMittal, with its diversified business model, strong cash-flow and cost leadership position, is well placed to weather the challenging economic environment we currently face. We remain optimistic about the industry’s medium-term growth prospects, but it is appropriate to pause our growth strategy until we have a more settled economic outlook,” he added.

source: Indiainfoline

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