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Steelmaker ArcelorMittal has reported a wider net loss for the fourth quarter as its sales continued to slump due to sluggish demand in Europe and slowdown in the Chinese economy.
The world's largest steel producer reported a fourth-quarter net loss of $3.94bn (£2.52bn, €2.91bn), or $2.58 per share, compared to a net loss of $1bn, or $0.65 per share, in the prior-year quarter.
During the quarter, the company booked a $4.3bn charge as it wrote down the value of its European steel business.
Quarterly sales declined to $19.31bn from $22.45bn. Iron ore production declined to 14 metric tonnes from 15.1 metric tonnes, and iron ore shipments fell to 6.6 metric tonnes from 8.5 metric tonnes.
Crude steel production declined to 20.8 metric tonnes from 21.7 metric tonnes, and steel shipments declined 2.7 percent to 20 metric tonnes.
Earnings before interest, tax, depreciation and amortization (EBITDA), a key metric for ArcelorMittal calculated as operating income plus depreciation, impairment expenses and exceptional items, totalled $1.32bn in the quarter. That compares to $1.71bn in the fourth quarter of 2011.
"2012 was a very difficult year for the steel industry, particularly in Europe where demand for steel fell a further 8.8 percent," chairman and CEOLakshmi Mittal said in a statement.
Looking ahead, the company expects EBITDA in 2013 to exceed last year's $7.1bn with increased shipments. Marketable iron ore shipments would increase by about 20 percent due to production expansion at the company's mines in Canada, it noted.
Overall output is expected to increase by 2 percent to 3 percent in 2013, while global steel use will climb by 3 percent, the company said.
"Although we expect the challenges to continue in 2013, largely due to the fragility of the European economy, we have recently seen some more positive indicators, which combined with the measures we have implemented to strengthen the business, are expected to support an improvement in the profitability of our steel business this year," Mittal said.
Steel-industry has suffered a decline in demand due to Europe's economic crisis and slowdown in Chinese growth.
Steel industry lobby Eurofer said on 5 February that the sector would remain stuck in reverse gear as European steel demand is likely to fall further in 2013.
"We do expect a more supportive economic environment towards the end of the year. But it will take most of 2013 before our customers in industry and the steel distribution chain will notice any improvement in business conditions. Confidence may be rising, but only from a depressed level. Financing and credit are still tight," Eurofer director-general Gordon Moffat said in a statement.
ArcelorMittal reduced its net debt by $1.4bn to $21.8bn by the end of the fourth quarter, after its credit rating was cut to junk by Moody's Investors Service, Standard & Poor's and Fitch Ratings.
The company added that it recommends a reduction in annual dividend payment to $0.20 per share for 2013.