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ArcelorMittal Reports Record Results for 2007
02/14/2008 - ArcelorMittal announces net income of $2.4 billion on sales of $28.0 billion for the fourth quarter, and net income of $10.4 billion on sales of $105.2 billion for the twelve-month period ended December 31, 2007.
ArcelorMittal announced net income of $2.4 billion on sales of $28.0 billion for the fourth quarter, and net income of $10.4 billion on sales of $105.2 billion for the twelve-month period ended December 31, 2007.
EBITDA of $19.4 billion represents a 27% compared to 2006, while the $10.4 billion net income represents a 30% increase versus last year. The strong year-end figures might have been even better if not for less-robust fourth-quarter results, which included a 17.7% decrease in net income on a 9.7% increase in sales, as compared to the third quarter of 2007.
“2007 has been a truly excellent year for ArcelorMittal,” commented Lakshmi N. Mittal, ArcelorMittal’s President and CEO. “We are announcing today record earnings with EBITDA of $19.4 billion, some 27% higher than pro forma 2006 results, and strong cash flow from operations. This reflects the strength of the ArcelorMittal business model, which enables us to benefit from a healthy global demand for steel in both the high-quality developed and fast-growth developing economies.”
By the end of 2007—the first full year of operations following the merger of Arcelor and Mittal Steel—the company had generated synergies of $1.4 billion. “I am very proud of the way the two companies have integrated so successfully,” said Lakshmi Mittal, “building a steel company which is focused on leading the transformation of our industry towards a sustainable future. Today’s results clearly demonstrate the considerable progress that we are making in this regard.”
ArcelorMittal returned a total of $4.4 billion to ArcelorMittal shareholders in 2007, including $1.8 billion in cash dividends paid and $2.6 billion in share buy-backs. In keeping with its dividend policy of returning 30% of net income to shareholders, the company says it will return a total of $3.1 billion to shareholders in 2008, of which $2.1 billion will be in cash dividends and $1.0 billion will be in share buy-backs.
The company continued to pursue its three-dimensional growth strategy, announcing a total of 35 transactions through the course of the year.
“Separately, we have not let the integration process distract us from continuing to identify further opportunities for progress,” commented Mittal. “In 2007, we announced 35 acquisitions, all of which serve to strengthen ArcelorMittal’s global steel offering further. We have also identified 20 million tonnes of organic growth potential.
Fourteen of the 35 transactions announced in 2007 were completed in 2007, with a capital outlay of $12.3 billion including cash paid, debt assumed and fair value of equity issued. Specific developments included the 20 million tonnes of organic growth potential announced on September 11, 2007; geographic strategies advancing with transactions announced in Argentina, Brazil, China, Costa Rica, Egypt, Mexico and Poland; and development of product diversification, with announced transactions in pipes and tubes, galvanizing, stainless steel and wire businesses. The company also worked toward enhancing in value chain with progress in both mining activities and distribution
“Looking forward,” concluded Mittal, “we are expecting performance in the first quarter of 2008 to be comparable to the fourth quarter 2007 levels. We are very pleased with the performance and progress of the company”.
ArcelorMittal issued EBITDA guidance of $4.7 to $5.0 billion for first quarter 2008, which compares to EBITDA of $4.3 billion in the first quarter of 2007.
