ArcelorMittal Posts Slim Profit of $22 Million

LONDON — The world’s largest steel maker, ArcelorMittal, said on Friday that it earned $22 million in its third quarter, shrugging off deteriorating economic conditions in Europe and around the world.

The slim profit was an improvement on the $193 million loss the company reported a year earlier. Revenue of about $20.1 billion was also up, about 2 percent.

ArcelorMittal is benefiting from several years of cost-cutting, especially in its critical European region, after being weighed down with too much steelmaking capacity and hit hard by the financial crisis. Improving performance in ArcelorMittal’s steel business is also helping to ease the impact of sharply lower iron ore prices on the company’s large mining business.

A more closely watched measure of profit — earnings before interest, taxes, depreciation and amortization — rose 11 percent to $1.9 billion. The figure was better than analysts’ expectations, according to Citigroup. The company said it was well placed to achieve its pretax forecast of $7 billion for the year.

“This quarter’s results show the considerable improvement in our steel business, which has more than offset the fall in the iron ore price," Lakshmi N. Mittal, the company’s chief executive, said in a statement.

In a telephone interview, Mr. Mittal said that the company was seeing an increase in demand in Europe in steel, particularly for construction, an area that has long been weak. He also said a weaker euro was “improving our competitiveness.”

The company is still a long way from being the big moneymaker it was before the financial crisis curbed demand for steel in 2008, but demand seems to be stabilizing. Losses have halted in Europe after a long round of politically difficult plant closings in countries like France and Belgium.

The “Europe division was entirely responsible for the better-than-expected” results, Jeff Largey, an analyst at Macquarie Group, wrote in an email to clients. He credited higher steel shipments and better cost performance with making the difference.

ArcelorMittal, which is based in Luxembourg, reported operating income for Europe of $166 million in the third quarter, which ended on Sept. 30, the third consecutive quarter of profit in the region after six straight quarters of losses. A major reason was that the company was free of the write-offs that have been big contributors to losses in recent years.

Demand for steel in Europe remains depressed, around 28 percent below 2007 levels, the company said. By comparison, steel demand in North America is less than 1 percent below 2007 levels, and it has increased by more than 73 percent in China.

The company expects demand for steel to increase by as much as 3.5 percent for the year in Europe but only about 2 percent in China.

North America, where ArcelorMittal is also a leading producer, and Brazil are bright spots for the company, bringing in about 60 percent of its operating income.

Mr. Mittal said he expected demand to surge by 8.5 percent in North America this year as the auto industry continues to snap up steel for parts like doors and support beams. ArcelorMittal executives said they were concerned that the big drop in oil prices might dampen demand from the resurgent energy industry in the United States, but so far they have seen little impact.

While the steel business was in the doldrums, Mr. Mittal invested in the mining business, particularly in Liberia and Canada, thinking that selling iron ore offered better opportunities than forming it into steel.

But with the price of iron ore tumbling as a result of large new additions to mining capacity in Brazil and Australia, and weaker growth in Chinese demand, ArcelorMittal’s mining business is struggling, with operating income down by more than 50 percent.