STEEL maker ArcelorMittal said yesterday its first-quarter net profit jumped 67 percent thanks to higher sales and the spin-off of its stainless steel unit.

The world's largest steel maker recorded US$1.07 billion in net profit for the first three months of the year, up from US$640 million in the same period a year earlier. Sales rose 27 percent to US$22.18 billion, as shipments and steel prices increased.

The average price at which ArcelorMittal sold its steel rose 7 percent compared with the fourth quarter. It did not provide a detailed comparison with a year earlier.

The company's bottom line was further lifted by a US$419 million gain related to the spin-off of its stainless steel unit earlier this year.

"As anticipated, we have seen a stronger start to the year, with an increase in both shipments and selling prices," Chief Executive Lakshmi Mittal said in the earnings report. "This is expected to further improve in the second quarter as the underlying demand recovery continues."

He said he still expected that 2011 will be a better year than 2010, as the company continues to recover from the financial crisis that severely hit steel demand. ArcelorMittal said capacity utilization should reach about 80 percent in the quarter, compared to 75 percent in the first quarter.

Steel prices have been going up in recent months, but so has the cost of key raw materials such as iron ore. ArcelorMittal has been working to increase its own production of iron ore, by buying up reserves. The Luxembourg-based company produces about 6 percent of the world's steel.