Expressing his views on 1Q2016 results, ArcelorMittal SA (ADR)(NYSE:MT) CEO Lakshmi Mittal reported that it was a strong quarter. In fact, it was the best operating performance in six quarters with positive net income and free cash flow. The company has a balance sheet to showcase its industry leadership status. In addition, net debt stands at $12.7 billion.
Talking about the operating environment, ArcelorMittal have seen improvement in the past one quarter. However, China continues to be a threat, as there is an increasing gap between the production and domestic demand, while exports remain elevated. The CEO said that they must continue to reassure China to achieve these plans to manage over capacity.
At the same time, they continue to coordinate with the governments in their different operating jurisdictions. This step will ensure that correct protection steps are taken to get a level playing field. In 1Q2016, ArcelorMittal recorded positive advancements on trade measures in the United States and Europe. Pricing has recovered significantly during the second quarter with steel spreads moderate slightly.
However, if real demand remains positive and restricted, then steels spread can be supported by extended order lead times and good levels of inventory. The CEO added that he is delighted to announce that Action 2020 is advancing well. Their management is fully focused, all strategies are on course and the team is motivated to achieve success.
Focusing on the safety parameter, ArcelorMittal reported that the lost time injury rate in 2Q2015 was 0.79 times, higher than rate of 0.72 times in 1Q2016, and 0.68 times for 2Q2015. Further, for 1H2016, safety and health performance was stable at 0.78 times, lower than 0.79 recorded in the first half of 2015. It showed growth within Europe, NAFTA and Brazil offset by the intervals in the ACIS and the mining segments.