ArcelorMittal Reports Strong Results

Shares of ArcelorMittal (NYSE:MT)(AS:MT) rose following results that beat analysts’ expectations for adjusted EBITDA, thanks to solid performance in Europe and Brazil.

As of 5:56 am (1056 GMT), ArcelorMittal traded 6.3% higher at €24.58.

Adjusted EBITDA was reported at $1.58 billion, a 6% increase over the consensus expectation of $1.49 billion. The results reflect resilient pricing in Europe and cost-driven improvements in Brazil, counterbalancing softer demand that had previously raised concerns in Europe and the U.S.

Analysts at Barclays (LON:BARC) noted, "We are moving into a seasonally softer period, though some of the improvement is related to investments (e.g., Vega CMC) which should be structural improvements." Despite some volume challenges in Europe, pricing remained steady, dipping only $14 per ton quarter-over-quarter.

Brazil outperformed consensus estimates, benefiting from price and cost improvements. Analysts at Morgan Stanley (NYSE:MS) stated, "With a seasonal pick-up in volumes and fading one-off costs in Mexico, we see the current consensus 4Q24 EBITDA of ~US$1.5bn as 'achievable.’"

These regions provided significant positive surprises relative to analyst forecasts. However, ArcelorMittal encountered notable impairment and restructuring costs associated with European operations, including the closure of a coke oven battery in Krakow, Poland. When excluding these costs, reported EBITDA was slightly lower at $1.51 billion.

Free cash flow shifted to a positive $275 million, surpassing market expectations due to a $132 million release of net working capital. However, net debt rose to $6.2 billion from $5.2 billion in Q2, influenced by ongoing capital expenditures.

ArcelorMittal's guidance for 2025 remains cautious, with management hesitant to forecast demand recovery. They perceive current market conditions as unsustainable, especially in Europe, where steel prices have been weak. While some demand uptick is anticipated in the second half of 2024, it is primarily expected due to the end of destocking, rather than broader economic recovery signs.

Analysts and investors are looking towards year-end for more clarity on the company's cash position, with management reiterating guidance of a net working capital release of at least $1.5 billion by Q4. Capital expenditure expectations for the full year remain between $4.5 and $5 billion, consistent with previous guidance.