ArcelorMittal books big Q3 loss on steel price decline
Luxembourg-based steel giant ArcelorMittal reported a US$711mn loss for the third quarter, compared with net income of US$22mn a year before.
The loss includes US$500mn in exceptional charges related to the write-down of inventory following the rapid decline of international steel prices, the company said in its latest earnings release on Friday.
Sales fell to US$15.6bn from US$20.1bn in 3Q14, while Ebitda declined to US$1.35bn from US$1.91bn.
Steel shipments dropped to 21.1Mt from 21.5Mt, while crude steel output was down to 23.1Mt from 23.9Mt, the company said. Iron ore production fell 400,000t to 15.4Mt.
"Whilst we have delivered stable Ebitda compared with the second quarter, the already challenging operating conditions have further deteriorated during recent months, largely due to additional declines in steel prices caused by exceptionally low Chinese export prices," chairman and CEO Lakshmi Mittal said. "Our focus is on ensuring we take all the necessary steps to strengthen our competitiveness in this difficult environment."
The company, the world's largest steelmaker, expects market conditions to remain challenging next year, but has "a number of important programs underway across the business which will structurally improve Ebitda in 2016 and we also expect a significant reduction in our cash requirements," Mittal said.
BRAZIL
ArcelorMittal Brasil reported third quarter operating income of US$196mn compared with US$349mn a year ago.
Steel sales fell to US$2.13bn from US$2.71bn and Ebitda was down to US$313mn from US$460mn, the company said.
Crude steel output fell to 2.95Mt from 2.97Mt, but shipments rose to 3.13Mt from 2.84Mt.
In Brazil, the domestic economy continues to weaken as steel consuming sectors contract, particularly in the construction market. Arcelor now expects a decline of around 15% in Brazil's apparent steel consumption in 2015, versus a previous forecast of 11-13%, the release said.
In Latin America and the Caribbean, Arcelor also has operations in Mexico, Argentina and Trinidad and Tobago.
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