By Nathan Allen 
 

ArcelorMittal (MT.AE) said Thursday that its net profit dropped in the third quarter as a result of impairment charges relating to the acquisition of Ilva SpA and unfavorable currency swings.

Earnings dropped sharply in the third quarter after the group booked impairments of $509 million on asset sales related to the Ilva deal and foreign-exchange and financing losses of $475 million. As a result, net profit fell to $899 million from $1.21 billion a year earlier.

Stripping out one-off effects, earnings before interest, taxes, depreciation and amortization rose to $2.73 billion from $1.92 billion, slightly undershooting a company-compiled consensus of $2.75 billion.

Higher average steel prices buoyed sales, which rose to $18.52 billion from $17.64 billion, but still missed a consensus estimate of $19.64 billion compiled by FactSet.

Nevertheless, the group remains bullish on the industry, forecasting global steel consumption to grow by between 2% and 3% in 2018.

"We continue to see robust real demand and healthy utilization rates across all steel segments," Chief Executive Lakshmi N. Mittal said.

Investors and analysts have struggled to assess the impact of global trade tensions on the group, leading to considerable volatility in its share price, which is down more than 19% this year.

ArcelorMittal has long advocated for stricter measures in the U.S. and Europe against what it sees as unfair practices by Chinese producers and has described itself as a "net beneficiary" of U.S. steel tariffs. However, the resulting economic instability has reduced demand in some of its main markets, including the automotive and construction industries.

ArcelorMittal also said it has completed the takeover of Italy's Ilva SpA, which will be folded into the group's European flat-products unit and will now be known as ArcelorMittal Italia.

 

Write to Nathan Allen at nathan.allen@dowjones.com

 

(END) Dow Jones Newswires

November 01, 2018 04:37 ET (08:37 GMT)

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