ArcelorMittal SA, the world's largest steel maker, posted a fourth-quarter loss of $2.6 billion on Wednesday as demand for steel collapsed.
Sales in the three months ending Dec 31 were down 18 percent to $22.1 billion from a year ago, it said.
The company blamed its first ever quarterly loss on pretax charges of $4.4 billion on writing down stockpiled steel and raw material contracts as well as payouts to workers being laid off. It reduced output by a third in the quarter and said production cuts would continue in the first three months of this year until it manages to reduce steel stocks. The steel maker is shedding some 9,000 jobs worldwide and shuttering plants to make savings. For the first quarter of 2009, it forecast $1 billion in earnings before interest, tax, depreciation and amortization. Fourth-quarter EBITDA was $2.8 billion.
ArcelorMittal had sales of $27.99 billion in the fourth quarter in 2007 when it also made a profit of $2.44 billion. For all of 2008, it reported sales of $124.9 billion, up nearly a fifth from the previous year. But profits were down 9 percent to $9.4 billion from 2007. Steel shipments were down 7 percent. CEO Lakshmi Mittal said the company's good performance through 2008 had been hit hard by the sharp fourth-quarter slowdown. He said the first quarter looked challenging but "we are starting to see some signs of improvement."
The company said it has stepped up cutbacks and aims to save $2 billion in 2009. It is also strenuously trying to reduce the massive debt burden it accumulated from Mittal's 2006 takeover of Arcelor which formed the company and a recent program to boost output. ArcelorMittal said it has now managed to decrease its debt burden by $6 billion. It said it had refinanced some $4.8 billion in debt and credit facilities, pushing forward to 2012 repayments that were due in 2010 and 2011.