Luxembourg — MININGREVIEW.COM — April 30, 2009 – ArcelorMittal – the world’s biggest steelmaker – posted a wider-than-anticipated loss in the first quarter of 2009, as metals prices continued their decline and forced the company to cut the value of its inventories.
In an e-mailed statement released here the company revealed that the net loss in the first quarter had been US $1.06 billion (R9.5 billion), or US$78 cents a share, from a net income of US$2.37 billion (R21.3 billion, or US$1.68 a year earlier. The loss had exceeded the median estimate of US$594 million (R5.3 billion) among the five analyst forecasts compiled by Bloomberg News. Sales slumped 49% to US$15.1 billion (R136 billion).
“This is a bit of a shocker all-round,” Nick Hatch – an analyst at ING Bank NV in London – said by phone. “There’s been none of the bravado that we’ve seen from previous quarters, and pretty much all the main numbers are at the bottom end of the range or below. It looks as though the rest of the year will be extremely difficult.” Hatch rates the company a “sell.”
Weak orders from automakers and builders pushed global steel prices to a six-year low, and consumption will drop 15% in 2009, according to the World Steel Association
“Market conditions remain challenging,” ArcelorMittal CEO Lakshmi Mittal said in the statement. The company has renegotiated terms on its debt as the slumping prices and cuts in production have eroded revenue, leading to the company’s second straight quarterly net loss.
ArcelorMittal has shut blast furnaces in response to the slowdown. Rivals including Corus – the European unit of India’s Tata Steel Limited – Japan’s Nippon Steel Corporation and Germany’s Salzgitter AG, followed suit. Global production last month dropped 23.5%, compared with a year earlier, the World Steel Association said.
Caption, Pic 1: The hot rolling mill at ArcelorMittal’s ACB production site in Spain.