ArcelorMittal plunges to $8 bn annual loss in 2015

ArcelorMittal, the world's leading integrated steel and mining company, today reported a net loss of almost $8 billion (£5.4 billion) in 2015, depressed by falling steel prices and a surge in Chinese exports.

The company said its FY15 net loss stood at $7.9 billion, including $4.8 billion of impairments (primarily due to mining impairments) and $1.4 billion of exceptional charges (primarily related to the write-down of inventory following the rapid decline of international steel prices).

The loss was more than four times worse than the $1.86 billion posted for 2014. The company plans to axe the dividend and cut costs in response.

Excluding these exceptional and non-cash items, thr FY15 adjusted net loss was $0.3 billion compared to adjusted net income of $0.4 billion in FY14.

ArcelorMittal said its loss, including a $6.7 billion retreat in the fourth quarter last year, was mainly due to falling steel prices that were depressed by a surge in imports, and write-offs in the company's large mining business.

In the fourth quarter of 2014, ArcelorMittal had lost $955 million.

ArcelorMittal reported FY15 EBITDA of $5.2 billion and an EBITDA of $1.1 billion in the fourth quarter of the year, an 18.4 per cent decline from the previous quarter.

Net debt was lower at $15.7 billion as of 31 December 2015, compared to $16.8 billion as of 30 September 2015. The company's net debt was $0.1 billion lower compared to its level as of 31 December 2014.

The sale of ArcelorMittal's stake in Gestamp for $991 million (€875 million) would pare its net debt to $14.7 billion.

Steel shipments in FY15 stood at 84.6 million tonnes (down 0.6 per cent year-on-year) while fourth quarter steel shipments were down 6.8 per cent at 19.7 million tonnes compared to levels in fourth quarter of 2014.

ArcelorMittal said its FY15 iron ore shipments were down 2 per cent at 62.4 million tonnes, of which 40.3 million tonnes were shipped at market prices (+1.4 per cent) while fourth quarter 2015 iron ore shipments stood at 15.6 million tonnes (-4.2 per ent), of which 9.9 million tonnes were shipped at market prices (-0.5 per cent).

Aditya Mittal, the company's chief financial officer said prices of one important type of steel exported by the Chinese, hot-rolled coil, which is used in automobiles and other manufacturing, fell by about 40 per cent in 2015.

He said the industry was pursuing trade actions against Chinese exports in both the United States and in Europe, although he said that Europe was less effective in protecting its producers from dumping.

''Clearly the trade defence instruments that have been developed in the US are better,'' he said, ''They insure a fairer, level playing field.''

In addition, Aditya Mittal painted a picture of relatively weak demand for steel this year, with only the market in the United States showing growth.

He said that growth in European demand would be weaker this year than last, and that Brazil, a major market for ArcelorMittal, and China would continue to show declines. He added, however, that there were still pockets of strength for the company's products, including in the automobile industry.

The combination of reduced prices and a weakening world economy played havoc with ArcelorMittal's annual and quarterly results on Friday.

The company said it lost $7.9 billion in 2015, compared with a $1.1 billion loss in 2014. Revenue fell about 20 per cent last year to about $64 billion.