Cost-Cutting Initiatives Yield Improving Results at ArcelorMittal

ArcelorMittal (NYSE: MT  ) reported fourth-quarter and full-year results today. The steelmaker reported a loss of $1.2 billion or $0.69 per share on the quarter. However, fourth-quarter EBITDA was $1.9 billion and the company was free cash flow positive for the year. Overall, ArcelorMittal continues to show improvement as its EBITDA was up 23% from the prior year's fourth quarter and its losses continue to narrow.

The company reported sales of $19.8 billion in the fourth quarter, which is a slight gain from the  year-ago fourth quarter. This was driven in part by stronger steel and iron ore shipments. ArcelorMittal grew its steel shipments in the quarter by 4.4% over last year's fourth quarter. Meanwhile, iron or shipments for the full year grew by 9.6% over 2012.

In addition to strong shipments, the company continues to cuts costs in an effort to improve underlying profitability and cash flow. These cost-cutting efforts are forcing ArcelorMittal to take large write-offs that are leading to the reported quarterly losses. However, these efforts continue to improve the company's finances as evidenced by the fact that the company cut its net debt by $5.7 billion during 2013. Because of that its net debt is at the lowest level since the creation of ArcelorMittal in 2006.

Looking ahead the company expects to grow its 2014 EBITDA to about $8 billion. Further, it expects to see steel shipments rise by another 3%, while its iron ore shipments should increase by 15%. That should allow the company to continue to improve its balance sheet and create value for its investors. 


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2828437, ~/Articles/ArticleHandler.aspx, 9/4/2015 4:20:23 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Matt DiLallo

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

Today's Market

updated 7 hours ago Sponsored by:
DOW 16,374.76 23.38 0.14%
S&P 500 1,951.13 2.27 0.12%
NASD 4,733.50 -16.48 -0.35%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/3/2015 4:02 PM
MT $7.58 Down -0.03 -0.39%
ArcelorMittal CAPS Rating: ****