Steelmaker ArcelorMittal warns of uncertainty
Source: AFP
Steelmaker ArcelorMittal warned Wednesday that tariff uncertainty could cause further economic disruption as its global footprint helped it weather the turbulence in the first quarter.
The Trump administration has slapped 25 percent tariffs on imports of aluminium and steel, but its wider tariff measures on its major trade partners -- many of them on hold as negotiations are under way -- threaten to stall global economic growth as both businesses and consumers hold back on purchases.
"Heightened uncertainty around the terms of global trade is hurting business confidence and risks causing further economic disruption if not quickly resolved," ArcelorMittal's chief executive Aditya Mittal warned.
However, the company beat analyst expectations by posting a net profit of $805 million in the first quarter, although that was a decline of 14 percent from the same period last year.
Mittal called it a "quarter of consistent delivery and robust margins, particularly given the geopolitical challenges".
The company posted a net loss of $390 million in the final quarter of last year.
Mittal called it "encouraging... that around the world, governments are committed to supporting their domestic manufacturing industries."
He said US tariffs "are supporting higher prices and spreads" and called on the European Union to rapidly implement measures it has decided to take to protect steel manufacturers in the bloc.
"As a global company with operations in most major regions, exports are a relatively modest part of our sales and we will continue to focus on meeting the requirements of our domestic markets," Mittal added.
ArcelorMittal confirmed its base dividend and policy of returning a minimum of 50 percent of post-dividend annual free cash flow to shareholders.
It recently announced further share buybacks, another means of returning funds to investors.
ArcelorMittal also confirmed it would invest between $4.5 and $5 billion in efforts to decarbonise its steel production.
The company suspended a 1.8-billion-euro ($2 billion) decarbonisation investment in France at the end of last year and is carrying out a plan to shift some support jobs from Europe to India to save money.
Some 600 jobs are expected to be cut in France in both production and support roles.
ArcelorMittal's shares fell 2.9 percent in morning trading while the Amsterdam stock exchange all-share index was up 0.3 percent.
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Source: AFP
