ArcelorMittal (NYSE:MT) +9.2% pre-market after Q4 core profit came in above expectations and net debt dropped to a record low.
Q4 EBITDA totaled $925M, better than the average
forecast of $858M in a company poll, and net debt fell to $9.3B at the
end of 2019, the lowest level since the company was formed in 2006
through the merger of Arcelor and Mittal Steel.
ArcelorMittal has indicated it will substantially
increase dividend payments once net borrowings reach $7B, a target it
says may be achieved this year.
Results were mostly better than expected and included positive guidance on cash flows, leverage and the demand outlook this year, Citigroup analysts say.
Market conditions remain challenging, yet there are early signs of improvement, particularly in the company's core markets of the U.S., Europe and Brazil, CFO Aditya Mittal says.
On the broader market outlook, the world's top
steel producer says it is "more optimistic on the apparent demand
outlook for 2020" and forecasts global steel demand to rise 1%-2% this
year after expanding 1.1% in 2019.
For now, "the coronavirus will likely have a
short-term negative demand impact in China and to a lesser degree
elsewhere," the company says, seeing overall steel demand in the country
rising by as much as 1% this year.