BRUSSELS (Reuters) - ArcelorMittal ISPA.AS, the world's largest producer of steel, said improving steel prices and increased volumes had boosted its results in the second quarter, sending its shares up some 5 percent to their highest in nearly a year.
The group grew core profit in both mining and steel production in all of its regions except for Brazil, where selling prices were down by a quarter from last year as an economic downturn weighed on demand.
Core profit (EBITDA) almost doubled in the second quarter from the same period last year to $1.77 billion (1.34 billion pounds), well above the average $1.57 billion seen in a Reuters poll of eight analysts.
ArcelorMittal repeated its guidance for 2016 core profit to be above $4.5 billion, compared with $5.2 billion in 2015. "The price environment remains stable with some downside risk," Chief Financial Officer Aditya Mittal told a conference call.
Analysts at JP Morgan said the guidance appeared conservative, as annualising the profits of the first half would point to a level around $5.4 billion.
The group kept its outlook for global apparent steel consumption, taking into account inventory changes, to grow by up to 0.5 percent, though it downwardly adjusted its outlook for the steel market in the United States, because of a tightening of supply resulting in lower inventories.
Net debt fell to $12.7 billion as the result of a $3 billion share issue the group announced in February and the sale of a stake in Spanish group Gestamp.
In spite of both the United States and the European Union implementing anti-dumping measures, Mittal said exports from China were still up 9 percent in the first half.
"We must encourage China to deliver on its plans to rationalise production while working with authorities ... to ensure appropriate trade defence measures are adopted," Mittal said.
China has pledged to cut steel capacity by around 45 million tonnes this year and by 140 million by 2020, aiming to tackle a price-sapping annual surplus estimated at around 300 million tonnes, nearly double the output of the EU.
ArcelorMittal shares, which have added some 80 percent since the start of the year, rose as much as 5.2 percent in early Friday trade to 5.727 euros, hitting their highest since last August.
Editing by Philip Blenkinsop and David Holmes