/world business
BRUSSELS, Belgium (AP) -- ArcelorMittal, the world's largest steelmaker, said Wednesday that profit climbed 5 percent in the first quarter to $2.37 billion (€1.58 billion) as strong worldwide demand allowed it to hike prices despite higher costs.
Lakshmi Mittal, CEO of ArchelorMittal, says demand beyond Europe and the U.S. has helped the company
Chief Executive Lakshmi Mittal said demand outside Europe and the U.S. is weathering global uncertainties and unprecedented raw material price increases thanks to the "continued industrialization of a number of key emerging economies" in Asia and eastern Europe.
The company has expanded rapidly into fast-growing regions, recently snapping up operations in Latin America and China.
ArcelorMittal's first-quarter result missed analysts' forecast of $2.55 billion (€1.65 billion), based on a consensus of 10 analysts surveyed by Dow Jones Newswires. ArcelorMittal made $2.25 billion (€1.72 billion) in the same period last year.
Sales in the first three months of the year were $29.8 billion (€19.89 billion), a 22-percent increase from $24.47 billion (€18.67 billion) a year ago as shipments rose 8 percent.
Mittal said the company has now managed to capture $1.6 billion (€1 billion) in merger savings, a year earlier than planned. ArcelorMittal emerged in 2006 out of a bitter takeover battle by Mittal Steel for Arcelor.
The company was upbeat about the year ahead, saying it expected record results from Asia, Africa and the former Soviet states as volumes pick up and prices increase. Higher steel prices in North America and Europe would also help as demand slows on lower economic growth, it said.
ArcelorMittal announced another European price increase for flat carbon -- used to make cars, trains, ships and large machines -- to hit customers in July and August. It plans to raise prices by a fifth on average -- far more than rival Salzgitter. This comes on top of a February price hike of 7 percent on the back of surging iron ore prices.
The steelmaker blamed a significant rise in raw material prices since the start of the year, including a 200-percent rise in the cost of coking coal, and said this had been exacerbated by the doubling of scrap metal prices in recent months.
Copyright 2008 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.
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