Sales in the fourth quarter of 2011 decreased by 6% to USD 1,436 million compared to USD 1,520 million in the third quarter of 2011. Shipments in the fourth quarter of 2011 were flat at 429,000 tonnes compared to 429 thousand tonnes in the third quarter of 2011.
EBITDA was USD 53 million in the fourth quarter of 2011 compared to EBITDA in the third quarter of 2011 of USD 62 million. The decrease in EBITDA quarter versus quarter was primarily driven by lower activity resulting from the seasonal slowdown in South America and a decrease in base and transaction prices. These factors impacting EBITDA were partially offset by the continuing progress of the "Leadership Journey", which has contributed USD 176 million to EBITDA since the beginning of the year. Aperam had an operating loss in the fourth quarter of USD 29 million compared to an operating loss of USD 20 million in the previous quarter.
Net interest expense and other financing costs in the fourth quarter of 2011 were USD 27 million, including financing costs of USD 16 million. Unrealized foreign exchange and derivative gains were USD 2 million in the fourth quarter of 2011. The Company recorded a net loss of USD 46 million, inclusive of an income tax benefit of USD 8 million in the fourth quarter of 2011. Cash flows from operations in the fourth quarter were a positive USD 227 million, with a working capital decrease of USD 253 million. CAPEX in the fourth quarter was USD 51 million.
Stainless & Electrical Steel
The Stainless & Electrical Steel segment had sales of USD 1,107 million in the fourth quarter of 2011. This represents a decrease of 3% compared to sales of USD 1,143 million in the third quarter of 2011. Shipments during the fourth quarter were 396,000 tonnes, including 238,000 tonnes in Europe and 158,000 tonnes in South America. This is an increase of 6 thousand tonnes compared to the previous quarter's shipments of 390 thousand tonnes (222,000 tonnes in Europe and 168 thousand tonnes in South America). Volumes in South America decreased by 6% in the quarter due to seasonality. Despite this decrease in South America, overall volumes for the segment increased slightly as a result of the 7% increase in volumes in Europe due to the reduced impact of seasonality in the quarter compared to the previous quarter.
The segment had EBITDA of USD 26 million in the fourth quarter of 2011 compared to USD 23 million in the third quarter of 2011. EBITDA from South America decreased from USD 26 million in the third quarter of 2011 to USD 23 million in the fourth quarter of 2011. EBITDA from Europe increased from negative USD 3 million in the third quarter of 2011 to USD 3 million in the fourth quarter of 2011. Average steel selling prices for the Stainless & Electrical Steel segment were lower for the quarter.
The Stainless & Electrical Steel segment had an operating loss of USD 37 million during the fourth quarter compared to an operating loss of USD 45 million in the third quarter of 2011. Depreciation and amortization expense was USD 63 million in the fourth quarter of 2011.
Services & Solutions
The Services & Solutions segment had a 13% decrease in sales during the period, from USD 630 million in the third quarter of 2011 to USD 546 million in the fourth quarter of 2011. In the fourth quarter of 2011, shipments were 149 thousand tonnes compared to 164 thousand tonnes in the previous quarter. In addition to lower shipments, the Services & Solutions segment also had lower average selling prices for the period.
The segment had negative EBITDA in the fourth quarter of USD 6 million compared to negative EBITDA of USD 1 million in the third quarter of 2011. EBITDA for the quarter was again impacted by the seasonality at the end of the year and lower average selling prices. In addition, the segment was also impacted by a negative stock effect resulting primarily from the decline in nickel prices that occurred during the quarter.
The Services & Solutions segment had an operating loss of USD 17 million in the fourth quarter of 2011 compared to an operating loss of USD 8 million in the third quarter of 2011.
Alloys & Specialties
The Alloys & Specialties segment had sales in the fourth quarter of USD 153 million, representing a decrease of 7% compared to USD 164 million in the third quarter of 2011. Shipments were comparable at 8 thousand tonnes in the third quarter to 8 thousand tonnes in the fourth quarter.
The Alloys & Specialties segment achieved EBITDA of USD 12 million in the fourth quarter of 2011 compared to USD 11 million in the third quarter of 2011. Average selling prices in the quarter were down as a result of lower nickel prices.
The Alloys & Specialties segment had operating income of USD 10 million in the fourth quarter of 2011 compared to operating income of USD 10 million in the third quarter of 2011.
