Profits dip at steel tycoon’s company

BRITISH-BASED tycoon Lakshmi Mittal announced a dip in profits for the world’s largest steelmaker yesterday after prices softened and raw material costs rose.

Mittal Steel unveiled net income of $1.09 billion (€0.88bn) for the three months to June 30. This compared with $1.15bn (€0.93bn) in the previous quarter and $1.28bn (€1.03bn) a year ago.

Following the €6.5 billion acquisition of ISG in April, the enlarged company - 88% owned by the Mittal family - has steel-making facilities in 14 countries and employs around 180,000 people.

Indian-born Mr Mittal, who founded the business - formerly LNM Group - in 1976, said oversupply in the industry had affected demand and prices.

This followed a cooling in the rapid growth of emerging countries such as China. As a result, the company reduced production in the third quarter to September 30, following a similar-sized cut in the previous quarter.

Mr Mittal said current trading conditions remained tough, with third-quarter selling prices expected to be “significantly” lower.

Despite the downturn, Mr Mittal said indicators forecast an eventual pick-up in prices as steel demand starts to improve.

Earlier this year, Mr Mittal was named by the Sunday Times as the richest man in Britain with a personal fortune estimated at €21.5bn. He awarded himself a €1.59bn bonus and is thought to have become Britain’s best paid boss after merging his two steel companies, LNM and Ispat, in October. With the additional business of Ohio-based ISG, Mittal Steel is expected to generate annual sales of over €24bn.