Mittal, Arcelor look to future as takeover battle hots up |
Steel giants Mittal and Arcelor issued upbeat outlooks Friday despite reporting drops in first-quarter profit, with Mittal also hailing expected US approval for a proposed but contested takeover of its smaller rival.
Mittal, the biggest steelmaker worldwide in terms of volume, has struggled since the beginning of the year with a bid for Arcelor that is currently worth around 22 billion euros (28 billion dollars), but stressed it would "go live shortly".
Despite the green light from the US authorities announced by Mittal on Friday, the Netherlands-based group also has to get approval from European competition officials.
Mittal suffered a set back Wednesday when the European Commission put back its deadline for making a decision by two weeks to June 7.
On Friday, Mittal said its net profit had fallen to 743 million dollars (576 million euros) in the first quarter, but forecast a pick-up in the second quarter.
Chairman and chief executive, Lakshmi Mittal, said that improving market conditions "will drive significant growth in operating income in the second quarter and this momentum can be expected to continue into the third quarter".
Operating profit fell in the first quarter to 1.017 billion dollars from 1.719 billion in the same period of 2005. Sales rose 31 percent to 8.43 billion dollars from 6.424 billion a year earlier.
In Paris, Arcelor said its net profit had fallen by 19.8 percent in the first quarter from the equivalent figure for 2005 because of lower steel prices and a rise in the cost of raw materials.
Arcelor reported net profit of 761 million euros, with chief executive Guy Dolle forecasting "very good results" for the rest of the year.
"The market is positive for volumes. Prices have started to rise again. The results of the second quarter will be of the same order as the first and the third quarter will be better," he told AFP.
"It will be a very good year and better than people thought four or five months ago."
Arcelor said its sales had risen 17.3 percent in the first quarter to 9.565 billion euros.
Its shares showed a loss at midday of 0.48 percent at 35.28 euros on the Paris stock exchange, while the CAC 40 index of leading shares was down 1.47 percent.
Mittal shares had lost 1.34 percent to 31.65 euros in Amsterdam, where the AEX index was off 1.66 percent.