ArcelorMittal logs 709 mn Q3 loss

The sales during the July-September quarter stood at USD 19.72 billion as against USD 24.21 billion during the same period in 2011,according to a company statement.

The company said the global economy was impacted during the quarter due to slowdown in China.

8220;The already fragile global economy was further impacted in the third quarter of 2012 by the slowdown in China. This resulted in very challenging operating conditions for ArcelorMittal,which are expected to continue in the fourth quarter,8221; said Lakshmi N Mittal,Chairman and CEO of ArcelorMittal.

Against this backdrop,the company is focused on delivering its plan of asset optimisation,net debt reduction and productivity and efficiency improvements,he added.

8220;Net debt increased by USD 1.2 billion during 3Q 2012 to USD 23.2 billion,driven by negative operating cash flow including a USD 0.3 billion investment in working capital and negative foreign exchange impacts partially offset by proceeds from asset disposal and an issuance of perpetual securities,8221; the statement said.

ArcelorMittal cuts dividend after tumbling to loss

ArcelorMittal,the world8217;s largest steelmaker,said it would slash its dividend and focus on cutting debt after slowing demand from China and sluggish European markets drove it to a third-quarter loss.

The group,which makes 6-7 per cent of the world8217;s steel,said on Wednesday there was little prospect of a quick recovery in the 500 billion steel industry 8211; a gauge of the global economy 8211; and scrapped its forecast for core profit per tonne in the second half of the year to be similar to that in the first.

Very challenging operating conditions for ArcelorMittal 8230; are expected to continue in the fourth quarter,Chief Executive Lakshmi Mittal said in a statement.

ArcelorMittal shares fell 2.8 per cent in early trade,making them among the weakest performers in the FTSEurofirst 300 index of leading European stocks.

The steel industry has slowed sharply this year from last,as a moderation in China8217;s economic growth rate has compounded weak demand from austerity-hit Europe.

The World Steel Association earlier this month forecast steel demand would rise by 2.1 per cent in 2012,down from 6.2 percent in 2011. It had forecast 3.6 per cent growth in April.

Other steelmakers are hurting too. South Korea8217;s POSCO ,the world number four,last week cuts its annual investment target after a 25 per cent drop in quarterly profit.

ArcelorMittal reported a third-quarter core profit of 1.34 billion,in line with analyst expectations,but its lowest level in three years.

The group said it believed European Union demand would fall by 8 per cent this year,making it 29 per cent below pre-crisis levels. It has responded by announcing the closure of blast furnaces in Belgium and France.

Including an impairment and restructuring charges related to those closures,as well as a one-off hit from a new U.S. labour contract,ArcelorMittal tumbled to a net loss of 709 million,greater than the 193 million loss expected.

Cutting debt

ArcelorMittal,whose output is more than double that of its nearest rival,said it would propose reducing the annual dividend payment to 0.20 per share in 2013,only to be progressively increased once deleveraging was complete. It paid out 0.75 this year.

Economic weakness,particularly in Europe,prompted ratings agency Standard amp; Poor8217;s to cut the steelmaker8217;s debt to junk status in August. Moody8217;s cut its outlook to negative.

The latter has said that ArcelorMittal must cut net debt by 5 billion by early 2013 to avoid a downgrade.

For the full year,ArcelorMittal said it expected core profit to be around 7 billion. The average Thomson Reuters I/B/E/S forecast is 7.34 billion.