ArcelorMittal Europe reports Q3 loss of 23 million euro

ArcelorMittal Europe reported an operating loss of 23 million euros on Friday for the third quarter ended on September 30.

ArcelorMittal Europe reported an operating loss of 23 million euros on Friday for the third quarter ended on September 30.

Employees at the ArcelorMittal steel plant of Grande-Synthe, northern France. ArcelorMittal Europe has reported an operating loss of 23 million euros for the third quarter ended on September 30.(AFP File Photo)

The company had reported operating profit of 125 million euros in the same quarter last year.

“While Ebitda for the quarter was 496 million euros, the segment recorded an operating loss of 23 million euros, compared with an operating profit of 125 million euros for Q3 2014,” the company said in a statement.

Record levels of imports, particularly from China and the CIS (Commonwealth of Independent States), have placed significant downward pressure on European steel prices.

“As a result, the segment’s operating profit for the third quarter was negatively impacted by a 256 million euros exceptional charge related to the write-down of inventory following the rapid decline of international steel prices,” it said.

ArcelorMittal Europe sales also decreased by 5.7% to 6.9 billion euros in the quarter, from 7.3 billion euros in the corresponding quarter last year, as a result of lower average selling prices and marginally lower steel shipments.

Steel shipments in the third quarter decreased by 1.9% to 9.6 million tonnes, compared with the third quarter of last year.

Company CEO Aditya Mittal said, “Record, and still rising, levels of imports are materially impacting steel prices. Certain EU anti-dumping investigations are underway, but the process is slow and needs to be more efficient in order to effectively and fairly protect European steel producers from unfair trade. “The ongoing price deterioration has led us to book a 256 million euros exceptional charge for the quarter, meaning we have reported an operating loss for the first time in seven quarters.”

He said the outlook for European steel demand remains positive, and “we forecast apparent steel consumption in 2016 at similar levels to the +2% we have seen for this year.

However, given imports into the European market are forecast to remain at high levels, we anticipate pricing pressure to continue into 2016, which will make it challenging for European steelmakers to benefit from the ongoing demand”.

The European economy is on course for a continued gradual acceleration in 2016, supported by monetary stimulus, a competitive euro, falling commodity prices, and pent-up demand, Mittal said. Consumers are benefiting from low inflation and a steady recovery in employment.

Better profitability, improved credit conditions and rising capacity utilisation, should help the modest investment recovery gain some momentum in 2016, Mittal added.