Written by: Sandy Williams
ArcelorMittal closed a difficult year with a net loss of $3.73 billion for 2012. The loss included a $4.3 million write-down on its European assets and a $1.3 billion loss from idled and closed plants during restructuring. In comparison, net income was $2.3 billion in 2011.
“2012 was a very difficult year for the steel industry, particularly in Europe where demand for steel fell a further 8.8%. During the year we took a number of important steps to address the challenges we face, including concentrating our operational footprint on our more competitive assets and reducing net debt,” said Lakshmi N. Mittal, Chairman and CEO of ArcelorMittal.
Sales in 2012 decreased 10.4 percent to $84.2 billion from $94 billion in 2011 due to lower average sale price and volume.
Shipments of steel in 2012 declined to 86.8 million tonnes (95.6 million tons) from 85.8 million tonnes (94.5 million tons) in 2011. ArcelorMittal expects an increase in shipments of approximately 2-3 percent in 2013. Crude production in 2012 was 88.2 million tonnes (97.2 million tons), representing 6 percent of the world steel output.
“Although we expect the challenges to continue in 2013, largely due to the fragility of the European economy, we have recently seen some more positive indicators, which combined with the measures we have implemented to strengthen the business, are expected to support an improvement in the profitability of our steel business this year,” said Mittal.
ArcelorMittal forecasts company EBITDA to be higher in 2013 compared to 2012 and net debt to drop to $17 billion by June 30, 2013. The company expects $5 billion in cash receipts in the first half of 2013 from capital raised in January and completion of its 15 percent stake in ArcelorMittal Mines Canada (AMMC). Iron ore shipments are expected to increase by 20 percent in 2013 as a result of the expansion at AMMC.
ArcelorMittal also announced in its conference call that it is moving to full year guidance to encourage the market to look at longer periods of business which tend to be less affected by seasonality and lags. After moving from quarterly to half year guidance, yearly guidance was the next natural step for the company.
Officials declined to discuss ArcelorMittal’s interest in the sale of ThyssenKrupp, only saying that it is one of five companies in the bidding, and that a successful deal would be separate from the 17 billion net debt predicted by the end of June.
“I think at the end of the day we believe that the impact of TK will not be that significant, especially by June end and, therefore, does not impact our net debt forecast for June,” said Aditya Mittal, Chief Financial Officer.
Sandy WilliamsRead more from Sandy Williams
Latest in Steel Products
Leibowitz: The future of WTO dispute settlement in the MC 13 conference
This week, the World Trade Organization (WTO) ministerial conference convenes in Abu Dhabi, UAE. There are many issues on the WTO’s plate. The question is whether any resolution of these matters is likely or even possible. One of the most important issues is the future of the dispute settlement system, which has been rendered impotent […]
US rig count expands, Canada slips
Rig counts in the US and Canada were mixed again for the week ended Feb. 23. The US saw totals move higher, while Canadian rig figures slipped week on week (w/w), Baker Hughes’ latest data shows. US rigs The number of active rotary rigs in the US expanded by five to 626 from the previous […]
North American auto assemblies recover in January
North American auto assemblies recovered in January after a usual seasonal slowdown at year-end, according to LMC Automotive data. The result was driven by improved production across the region vs. December’s output.
Nucor board OKs new rebar micro mill for Pacific Northwest
Nucor Corp. announced plans to build a new rebar micro mill in the Pacific Northwest.
US rig count slips, Canada higher
Rig counts in the US and Canada were mixed again for the week ended Feb. 16. The US saw totals move down, while Canadian rig figures ticked up week on week (w/w), Baker Hughes’ latest data shows.