BRUSSELS: ArcelorMittal reported higher-than-expected core profit in the first quarter on Thursday, but said it now forecast a slight contraction in global steel demand this year, with a sharp decline in the former Soviet Union countries.

The change in global steel demand in 2022 will be between 0% and -1%, the company said. For the Russia and Ukraine region, demand will be 10% lower.

The Luxembourg-based company also increased its buyback program for 2022 to $2.0 billion, from $1.0 billion previously completed.

The world’s second-largest steelmaker said earnings before interest, tax, depreciation and amortisation were $5.08 billion, against the average forecast of $4.57 billion in a company-compiled poll.

“Market conditions are currently strong although we are now anticipating apparent steel consumption to contract slightly this year compared with 2021,” CEO Aditya Mittal said in a statement.

The group said even if its results were overshadowed by the war in Ukraine and rising inflationary pressures, it benefited from higher average steel selling prices and higher iron ore prices.

“Nevertheless, it is clear that the longer-term fundamental outlook for steel is positive,” he said.