ArcelorMittal Positive on 2018, Proposes Dividend -- Earnings Review

ArcelorMittal (MT.AE) reported its fourth-quarter results before the market opened on Wednesday. Here's what you need to know:

SALES: Sales rose by about 25% to $17.71 billion due to higher steel and iron-ore shipments and higher average steel selling prices. The results fell slightly short of a FactSet-compiled consensus of analyst estimates that forecast $17.94 billion.

NET INCOME: The steelmaker posted quarterly net profit of $1.04 billion, more than doubling its result from a year ago, propped up by sales performance. The company recorded an income tax benefit of $119 million in the quarter, which compares with a $71 million tax expense in the year-earlier period.

MACRO OUTLOOK: ArcelorMittal was upbeat about the steel industry outlook for 2018, saying that the demand environment remains positive and steel spreads remaining healthy. The company estimates global steel demand--measured through apparent steel consumption--to grow between 1.5% and 2.5% in 2018, with Chinese demand flat.

CASH FLOW: Net debt decreased this quarter by $1.9 billion to $10.1 billion, mainly due to positive free cash flow. The debt figure at year-end was $0.9 billion lower than on Dec. 31, 2016. ArcelorMittal said that it would continue to prioritize deleveraging--it has a net debt target of $6 billion--but proposed a dividend of $0.10 per share in 2018. Once the debt level falls to or below its target, the company will return a portion of annual free cash flow to shareholders, it said.

ILVA: ArcelorMittal said that it will continue "to work closely and constructively" with the European Commission, which has opened a phase II review of its proposed acquisition of Italian steelmaker Ilva. Arcelor's 1.8 billion euros ($2.23 billion) acquisition had become mired in controversy after an EU antitrust investigation ruled that the Italian government must recover around EUR84 million in illegal state aid.

Write to Alberto Delclaux at alberto.delclaux@dowjones.com

(END) Dow Jones Newswires

January 31, 2018 05:27 ET (10:27 GMT)