LONDON-- ArcelorMittal Friday reported its first quarterly profit in two years as it finally reaped benefits from closing mills in Europe and a resurgent steel industry in the U.S.
At the same time, a sharp drop in iron ore prices caused the company to reduce its earnings forecast, underscoring how dependent the world’s biggest steelmaker has become on mining for its profits. The warning helped shares to fall 3.6% to $14.67 at 1000 EDT.
Luxembourg-based ArcelorMittal MT +0.98% swung to a net profit of $52 million in the second quarter compared with a net loss of $780 million in the same period a year earlier. It had not been in the black since the second quarter of 2012, when it made $959 million.
Since the financial crisis, it is spent $1.4 billion, mostly in Europe, closing mills and reducing its workforce. That process is over. “Asset optimization is done,” Chief Executive Officer Lakshmi Mittal said in an interview.
And the U.S. and European economies “are starting to grow again,” said Mittal, highlighting sectors such as automotive and construction. The company even forecast steel demand to grow more swiftly, by 5% to 6% in North America, than in China, which is seen as growing 3% to 3.5%. In Europe, it is expected to grow 3% to 4%.