Mittal Steel Q2 net rises to $1.09 billion; Arcelor gains dip

02 August 2006

Mumbai: Mittal Steel posted a seven per cent rise in second quarter profit against a 35 per cent fall registered by Arcelor for the same period. Mittal reported a net profit of $1.09 billion for the April-June 2006 period against $1.02 billion for the same period last year. Net profit at Arcelor for the same period was down at $837 million from $1.34 billion for the same period in 2005.

Mittal Steel, the world''s biggest steel maker, which is buying its closest rival Arcelor, said its operating profit rose nearly 50 per cent from the previous quarter to $1.52 billion even as sales rose 9.5 per cent to $9.23 billion.

"As we anticipated in May, the recovery is now under way in Asia resulting into higher selling prices," chairman Lakshmi Mittal said in a statement. "Additionally, we have delivered a strong performance in Europe, particularly in Ukraine where synergies are now being delivered, and in America, where costs have been reduced," Mittal added.

"Looking forward, we expect market conditions to continue to improve, driving further growth in shipments and operating income in the third quarter," Mittal said.

Mittal Steel said it had already secured 92 per cent of the shares in Arcelor. Mittal had also said it would also reopen its offer for Arcelor before August 17 to give shareholders another chance to accept the bid.

May acquire Arcelor Brazil: Meanwhile, a Brazilian regulator has directed Mittal to make an offer to buy out shareholders of a Brazilian division of Arcelor as well. Mittal, by taking control of Arcelor SA, "has the legal obligation to make a mandatory buy-out offer to Arcelor Brazil shareholders," the regulator said on its website. The requirement excludes minority shareholders in Acesita SA, Arcelor''s stainless-steel unit in Brazil. The ruling could add an extra $3.8 billion to Mittal''s takeover costs.