Don’t worry, I want to create wealth: Mittal

“Today the world is in a very difficult financial crisis. We are facing challenges… Our focus today is to look after the company, to look after the shareholders. We are taking lot of initiatives within the organisation (including related to cutting production),” he said elaborating on the reasons for the decline in valuation of the company.

However, he was confident of regaining the pristine glory and capture the valuation that the company lost during the year and said, “I think whole of my management team would have that in mind and they are working towards creating more value.”

Mittal said the company had reported strong quarterly results and the focus was on the fourth quarter but conceded that net profit was hit by some accounting related one-time items such as provisions for pensions.

During the third quarter ending September, 2008, the company announced a higher sale of 35.2 billion dollars and net income of 3.8 billion dollars.

On net profit, Mittal said, “There are some one-time items because of the accounting that is bringing down our net profits. For example, we provided for pension, liability for which did not come under the US GAAP (accounting norms)… we are within the guidance.”

Mittal clarified that the EBITDA (operational earnings) for the quarter was in line with the guidance for 8.5 billion dollars.

“We are in line with the guidance which we gave… we are very happy about our this quarter results… Due to the financial crisis, we are experiencing bad economic time. The demands are soft. All the economies whether developed or developing are getting affected by the financial crisis,” he said.

On the course ahead, he said, “We remain optimistic about the industry’s medium-term growth prospects but it is appropriate to pause our growth strategy until we have a more settled economic outlook.”

At the same time, he said the company has taken measures to ensure that it was well adapted to the current environment.

“Our focus remains on cost leadership and service to customers. The current period of de-stocking requires that we made appropriate production cuts to rebalance supply and demand. We are also accelerating efforts to pay down the debt,” he said.

With a diversified business model, strong cash-flow and cost leadership position, ArcelorMittal was well placed to weather the current economic challenges.

No sellers in India: Mittal

NRI steel tycoon L N Mittal on Wednesday said valuation of steel companies in India had come down significantly but there were no sellers.

“Today is not the time for acquiring companies… these companies are very cheap today but I do not believe that there are sellers to sell these companies,” Mittal said replying to a query on whether he would look at acquisition in India in view of delays in his proposed 24 million-tonne Greenfield projects in the country at an investment of Rs 80,000 crore.

He, however, asserted that ArceolorMittal would not lose its focus on its major presence in the country.

High on good quarterly results with net profits growing by 29 per cent to USD 3.8 billion, Mittal said in a telephonic interview from Luxembourg that “everyone is looking for an opportunity”.

Mittal, who has created the world’s largest steel empire and threw a slew of mergers and acquisition across the globe, was responding to a query whether he would prospect for more companies as global valuations of entities have come down.

When asked about the India market, he said, “Our long-term strategy for India is unchanged. We continue to believe in India. We continue to believe in its future growth. Globally India is considered as a growth market”.

“I can clearly see a bright prospect and future for India,” he added.

On the current economic scenario, he said everyone is waiting for quick return to normal scenario. “There are production cuts in China, in India, all over the world… de-stocking should take place”.

He said the Indian government and policy makers should take more steps to create a conducive atmosphere for generating higher demands.

“The government should invest more and encourage more spending in infrastructure and development. All the countries are doing so. All these things will bring the change,” Mittal said.

On whether he felt that Indian policy planners had taken the right steps to overcome the crisis, Mittal said, “What we would like to see is government helping people in buying more and investing more into housing, buying more in the retail market… Consumer expenditure should go up and government should commit more spending in infrastructure.”

Like the government, there should be commitments from all business houses so that it translates into a greater demand for housing and consumer durables, like for two-wheelers and cars, he said.