Falling prices push steelmaker ArcelorMittal annual loss to $7.9 bn
ArcelorMittal said Friday falling commodity prices pummelled its performance last year, pushing its net loss to almost $8.0 billion (7.1 billion euros) but the world's largest steelmaker said it was making progress on cutting costs.
The net loss of $7.95 billion in 2015 compared with a net loss of $1.86 billion in 2014.
Over half of the loss was due to writing down in its books the value of its mining operations to reflect the currently lower value of its iron ore, but even excluding exceptional items ArcelorMittal was $300 million into loss, compared to $400 million in 2014.
Chief executive Makshmi Mittal acknowledged in a statement that "2015 was a very difficult year for the steel and mining industries... Prices deteriorated significantly during the year as a result of excess capacity in China".
However, he said the mining business "is fully focused on adapting to this low price environment and has reduced cash costs by 20 percent compared with an initial target of 15 percent".
Mittal said a further 10 percent reduction in mining costs is targeted for 2016.
Sales dropped 20 percent to $63.6 billion, which mostly reflects falling prices as the company's iron ore production and steel shipments only dipped marginally.
Net debt dipped to $15.7 billion at the end of 2015 from $15.8 at the end of 2014.
Earnings before taxes, depreciation and amortisation (EBITDA) fell by 28 percent to $5.2 billion.
The company announced a new restructuring plan that aims to raise EBITDA per tonne to above $85, irrespective of changes in raw material prices. It fell from $86 per tonne in the fourth quarter of 2014 to $56 in the fourth quarter of 2015.
Overall the latest plan aims to improve structural EBITDA by $3 billion by 2020.
For 2016, the company said that based on current market conditions it expects EBITDA in excess of $4.5 billion this year.
ArcelorMittal also announced it had sold its 35 percent stake in the Spanish company Gestamp, which manufacturers steel parts for automakers, for 875 million euros.
The company's share price plunged at the start of trading on the Paris stock exchange. At 0813 GMT they were down 6.1 percent to 3.47 euros while the market was up 0.8 percent overall.
© 2016 AFP