ArcelorMittal announced results for its Flat Carbon Europe segment for the third quarter of 2012.
The segment recorded an operating loss of EUR 303 million which includes restructuring costs but excludes interest and tax costs. The total operating loss now for the first nine months of 2012 is EUR 643 million reflecting the continued difficult operating environment in Europe where further weakening of demand has combined with a seasonal slowdown.
Compared to 2Q 2012, the segment's crude steel production fell 5.9% to 6.7 million tonnes in 3Q 2012
Steel shipments for 3Q 2012 fell to 5.8 million tonnes, a decrease of 13.8% as compared to 6.8 million tonnes for 2Q 2012 and a decrease of 8.6% as compared to 6.4 million tonnes for 3Q 2011 reflecting the decline is not just seasonal
Sales were EUR 4.9billion for 3Q 2012, a decrease of 12.5% as compared to EUR 5.6 billion for 2Q 2012. Sales decreased primarily due to lower steel shipment volumes and lower average steel selling prices (-1.0%)
Capital expenditure in the segment for the third quarter of 2012 was EUR 145 million and for the first nine months of 2012 CAPEX spend reached EUR 520 million
Europe has seen declining GDP since the third quarter of 2011 due to continuing decline in investment and consumption, as austerity and record unemployment weigh on demand. No sustained pick up in Europe is expected before 2014 and the euro zone as a whole is likely to at best stagnate in 2013. PMI remains below 50 for a fifteenth month indicating manufacturing contraction. Apparent steel demand in the European Union in the first three quarters of 2012 is estimated to have declined around 9.5% YoY and we expect it to decline by close to 8% for the year as a whole. EU demand is now at least 28% below 2007 levels.
Mr Robrecht Himpe head of Flat Carbon Europe and member of the ArcelorMittal management committee said that "Underlying steel demand continues to weaken in Europe. Our customers remain cautious and uncertainty is causing them to scale back capital investment. Auto demand is an obvious example and there have been more announcements in recent weeks from major manufacturers as they continue to review activity in Europe. During the last quarter we've continued to implement measures to respond to this situation, to deliver excellent service to our customers and to become more competitive."
Source - ArcelorMittal
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