ArcelorMittal (AM) is reporting a net loss in the third quarter of $709
million dollars or 46 cents per share, compared to a net income of $959
million or 62 cents in the second quarter and a net income of $659 million
or 43 cents in the year-ago period.
“The already fragile global economy was further impacted in the third
quarter of 2012 by the slowdown in China,” AM Chair and CEO Lakshmi Mittal
said in a statement released today. “This resulted in very challenging
conditions for ArcelorMittal, which are expected to continue in the fourth
quarter. Against this backdrop, the company is focused on delivering its
plan of asset optimization, net debt reduction, and productivity and
•The Board of Directors is proposing to slash the annual dividend payment by
more than two-thirds, to 20 cents per share from 75 cents in 2012, given
“the challenging economic conditions and the company’s priority to
•Net debt increased by $1.2 billion during the third quarter, to $23.2
billion, “driven by negative operating cash flow (including a $300 million
investment in working capital) and negative foreign exchange impacts.”
•Steel shipments dropped in the third quarter to 19.9 million metric tons,
8.3 percent below the second quarter and 5.7 percent below the year-ago
The company is not expecting to be profitable in the second half of the
year. Or according to the statement, the “fall in the iron ore price and the
weaker global economic backdrop adversely impacted steel prices and steel
volumes as well as the profitability of our mining operations, affecting our
previous expectations for group profitability in 2H 2012.”
The company is expecting, on the other hand, to reduce net debt to around
$22 million. “De-leveraging is a priority as the company continues to target
an investment grade rating,” the statement said.
•Sales of $19.723 billion, compared to $22.478 million in the second quarter
and $24.214 in the year-ago. The company attributed the drop chiefly to
lower steel shipment volumes and lower average selling prices.
•Shipments of 19.9 million metric tons, compared to 22.8 million in the
second quarter and 22.4 million in the year-ago.
•Crude steel production of 21.9 million metric tons, compared to 22.8
million in the second quarter and 22.4 million in the year-ago.
•An operating loss of $49 million, compared to an operating income of $1.101
billion in the second quarter and $1.168 billion in the year-ago. That
result was negatively affected by a $72-million one-time signing bonus and
post-retirement benefit costs following the ratification of the new
three-year contract with the United Steelworkers.
•Operating income of $3 million, compared to $245 million in the second
quarter and $193 million in the year-ago.
•Sales of $4.84 billion, compared to $5.359 billion in the second quarter
and $5.499 billion in the year-ago. “Sales were impacted by lower steel
selling prices in North America, weakening slab pricing, and lower dollar
prices in South America due to depreciation of Brazilian Real,” the company
•Average selling price of $850 per ton, compared to $881 in the second
quarter and $910 in the year-ago.
•Operating income per ton of $1, compared to $43 in the second quarter and
$34 in the year-ago.
•Crude steel production of 5.726 million tons, compared to 6.014 million in
the second quarter and 5.866 million in the year-ago.
•Shipments of 5.351 million tons, compared to 5.735 million in the second
quarter and 5.708 million in the year-ago.