ArcelorMittal trips on Europe into $3.7b loss

The world's top steel producer ArcelorMittal stumbled into the red last year with a net loss of $3.72 billion (2.75 billion euros) largely due to costs related to Europe, where it struggling to shut plants.
Operating profit measured by earnings before interest, tax and other charges (EBITDA) fell by 30 percent to $7.1 billion, close to analyst expectations.
"2012 was a very difficult year for the steel industry, particularly in Europe where demand for steel fell a further 8.8 percent," chief executive Lakshmi Mittal said in a statement.
The net loss was caused by a $4.3 billion accounting charge the company announced in December to write down the value of its assets in Europe, where demand for steel has fallen by nearly a third since the global economic crisis set in.
The Luxembourg-registered company also took another $1.3 billion in restructuring charges.
ArcelorMittal, which also has interests in iron-ore mines, had posted a net profit of $2.3 billion in 2011.
Sales fell by 10.4 percent to $84.2 billion in 2012, with shipments of steel down 2.3 percent to 83.8 million tonnes.
Shipments of iron ore shipments rose by 5.4 percent to 54.4 million tonnes, however, with more than half shipped at market prices.
The company said it expected steel sales to improve this year, climbing by 2-3 percent, with iron ore sales at market prices to rise by 20 percent.
ArcelorMittal said this should help it increase operating profit in 2013.
"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," said Mittal.
These, along with the steps the company has taken to focus on its most competitive assets and reduce its net debt "are expected to support an improvement in the profitability of our steel business this year", he added.
The expectations of improvement reassured investors, ArcelorMittal's share price climbing 2.65 percent to 12.75 euros in early trade in a broadly stable Paris market.
ArcelorMittal's refocusing of its activities has not gone smoothly.
The announcement last month it is shutting down six cold-processing facilities in Belgium sparked exchanges of paving stones and tear gas between workers and police over the loss of 1,300 jobs.
In France, ArcelorMittal faced threats last year of nationalisation of one facility over the fate of two blast furnaces.
After heated talks with the French government the blast furnaces are likely never to be reopened but the company promised to invest 180 million euros into the Florange facility and not cut any jobs.
The company also said that its net debt decreased by $1.4 billion over the fourth quarter owing to improved cash flow to stand at $21.8 billion at the end of the year.
ArcelorMittal is aiming to raise $3.5 billion in stock and subordinated notes to reduce its massive debt, which ratings agencies have warned threatens to break bank loan agreements.