ArcelorMittal will write down EU business value by $4.3 bn
22 Dec 2012 6:14 AM IST
Top world steelmaker ArcelorMittal said it was taking a roughly $4.3-billion charge to reflect the fallen value of its European operations due to weaker demand in the region.
The company on Friday said the non-cash charge would be taken in the fourth quarter ‘due to a weaker macro economic and market environment in Europe where apparent steel demand has fallen by approximately 8 per cent this year, bringing the cumulative demand decline to approximately 29 per cent since 2007.’
ArcelorMittal said net debt and operating profit, as well as compliance with debt covenants, would be unaffected by the impairment. However the write down will affect the company’s net profit, which it is due to report on 6 February. International accounting rules oblige companies to periodically adjust in their accounts the value of their assets to the current market value. ArcelorMittal said the weaker demand environment in Europe, and expectations that it will persist over the near and medium term, led to a downward revision of the value of its European businesses. In contrast, ArcelorMittal said US steel consumption is up by 8 per cent this year and is now just 10 per cent below its level in 2007 when the global financial crisis began to set in.
ArcelorMittal reported a third quarter net loss of $709 million and said that cutting its massive debt, which hit $23.2 billion at the end of September, was now the company’s top priority.
The company on Friday said the non-cash charge would be taken in the fourth quarter ‘due to a weaker macro economic and market environment in Europe where apparent steel demand has fallen by approximately 8 per cent this year, bringing the cumulative demand decline to approximately 29 per cent since 2007.’
ArcelorMittal said net debt and operating profit, as well as compliance with debt covenants, would be unaffected by the impairment. However the write down will affect the company’s net profit, which it is due to report on 6 February. International accounting rules oblige companies to periodically adjust in their accounts the value of their assets to the current market value. ArcelorMittal said the weaker demand environment in Europe, and expectations that it will persist over the near and medium term, led to a downward revision of the value of its European businesses. In contrast, ArcelorMittal said US steel consumption is up by 8 per cent this year and is now just 10 per cent below its level in 2007 when the global financial crisis began to set in.
ArcelorMittal reported a third quarter net loss of $709 million and said that cutting its massive debt, which hit $23.2 billion at the end of September, was now the company’s top priority.
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