ArcelorMittal's European troubles blamed for Q4 loss
By The Associated Press
Published: Wednesday, Feb. 6, 2013, 6:02 p.m.
AMSTERDAM — ArcelorMittal SA, the world's largest steelmaker, posted a near $4 billion loss for the fourth quarter, hurt by its ailing European business and a drop in the value of its assets.
The Luxembourg-based company announced on Wednesday its net loss widened to $3.99 billion from $1 billion in the same period a year ago. Sales fell 14 percent to $19.3 billion, as both prices and volumes declined year over year.
The loss included $4.8 billion in charges and writedowns related to its European business, notably the idling of plants in Madrid and Florange, France, and the decision to close a plant in Liege, Belgium, where 1,300 jobs are threatened. The company has clashed with governments and labor unions over the facilities and remains cautious about its European business this year despite improvements elsewhere.
At the European Parliament in Strasbourg, France, hundreds of steel workers from Belgium and France took their anger out on police, throwing bricks and steel bolts. Police answered with tear gas and charges. At least one demonstrator was hospitalized.
“Although we expect the challenges to continue in 2013, largely because of the fragility of the European economy, we have recently seen some more positive indicators,” said the company's founder and chief executive, Indian industrialist Lakshmi Mittal.
That, together with cost-cutting measures “are expected to support an improvement in the profitability of our steel business this year,” he said.
He forecast that steel shipments would grow by 2 to 3 percent in 2013 and operating profit — which was $7.1 billion for the full year 2012, a 30 percent fall from 2011 — would show at least some unspecified amount of growth in 2013.
Investors appeared encouraged by the relatively upbeat forecast and the company's shares rose 1.05 percent.
Alongside the results, the company issued a second press release, apparently intended to underline the divergent fortunes of Europe and the rest of the world since the global financial crisis that began in 2007.
Since then, global finished steel consumption has risen 16 percent, with China accounting for the bulk of the growth. In North America, consumption fell dramatically around the time of the financial crisis in late 2008, but quickly recovered and is now only about 8 percent lower than in 2007 and on an upward slope.
Europe initially recovered along with North America, but has since fallen away again as austerity measures hurt demand. Consumption is now nearly 30 percent lower than it was in 2007 and a decline appears to be accelerating.
The company has obvious reasons for wanting to underline the difficulties it has in Europe.
At Florange, the company initially wanted to close two blast furnaces, but protests that led one politician to threaten to nationalize the site, and the company struck a deal with French Prime Minister Jean-Marc Ayrault to retrofit the furnaces instead. It's investing $243 million to install systems that recycle blast gases and capture CO2. Six hundred jobs were saved.
In Liege, a dispute over 1,300 proposed layoffs continues. Clashes between striking workers and police left two officers injured as recently as Jan. 29.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Consider carefully details, people involved in financial trust
- Is tech wreck on way?
- More women seize opportunities to start businesses
- Meat prices drain barbecue budgets
- Investment in Western Pa. startups reaches 5-year high
- Wages have soared in Pittsburgh, but economy appears to have stalled
- ‘Sweet spot’ mid-cap stocks worthy of investor affection
- Consol Energy transitions as leadership changes hands
- Lawsuit challenges Hollywood standard of unpaid internships
- Pa. unemployment rate falls to lowest since 2008; 12,000 more enter workforce
- Chocolate prices expected to soar as ingredients grow more expensive