By Marine Strauss
BRUSSELS (Reuters) - ArcelorMittal, the world's largest steelmaker, reported higher than expected second quarter earnings and said its core markets were showing signs of recovery, albeit from exceptionally low levels.
ArcelorMittal, which withdrew its guidance for global steel consumption in May, said the speed and course of the demand recovery following the pandemic remained uncertain.
However, steel shipments should improve in the third quarter from the second, when they declined by 23.7% compared with the first three months of the year.
Shipments were down sharpest in its largest markets, North America and Europe, less steeply in Brazil and its segment covering Ukraine, Kazakhstan and South Africa in the April-June period.
The Luxembourg-based company said on Thursday that the automotive sector, a key customer, had restarted production and was recovering quite strongly in the United States, with a bounce-back of demand for machinery and metal products in Europe.
Construction had held up reasonably well, even in the worst of the crisis.
Net debt fell to $7.8 billion at the end of June from $9.5 billion at the end of March, the lowest level since ArcelorMittal's creation in 2006 and closing in on its target of $7 billion. ArcelorMittal has said it will not resume dividend payments before reaching that target.
The company's second-quarter core profit (EBITDA), the figure most watched by the market, was $707 million, less than half the year-ago figure but far higher than the average forecast in a company poll of $482 million.
The steelmaker said it had taken a series of actions to reduce costs and was looking into potential structural changes to reflect the post-pandemic future. It said it would announce these with full-year results, which are expected to be published in February 2021.
(Reporting by Marine Strauss @StraussMarine; editing by Philip Blenkinsop and Carmel Crimmins.)