The ArcelorMittal Group today announced its results for the third quarter ended 30 September 2015, revealing an operating loss of €23 million for its Europe branch.
The EBITDA of the Group was found stable for Q3 2015 compared with the year's quarter, at $1.4 billion. EBITDA for Q3 for ArcelorMittal Europe stood at €496 million, but the segment recorded an operating loss of €23 million compared with an operating profit of €125 million for Q3 2014.
This was attributed to the downward pressure on European steel prices initiated by record levels of imports from China and the CIS in particular. Conseqeuntly, the segment's operating profit for the third quarter was negatively impacted by a €256 million exceptional charge related to the write-down of inventory following the rapid decline of international steel prices.
Sales for the Europe branch were also down 5.7% from €7.3 billion in Q2 2014 to €6.9 billion in Q3 2015, due to lower average selling prices and marginally lower steel shipments, the latter of which decreased 1.9% to 9.6 million tonnes from Q3 2014 to the last reported quarter of 2015.
"Record, and still rising, levels of imports are materially impacting steel prices," commented Aditya Mittal, CEO ArcelorMittal Europe. "Certain EU anti-dumping investigations are underway, but the process is slow and needs to be more efficient in ordr to effectively and fairly protect European steel producers from unfair trade. The ongoing price deterioration has led us to book a €256 million exceptional charge for the quarter, meaning we have reported an operating loss for the first time in seven quarters".
He continued: "Outlook for European steel demand remains positive, and we forecast apparent steel consumption in 2016 at similar levels to the +2 per cent we have seen for this year. However, given imports into the European market are forecast to remain at high levels, we anticipate pricing pressure to continue into 2016, which will make it challenging for European steelmakers to benefit from the ongoing demand recovery".
The European economy is on course for a continued gradual acceleration in 2016, instigated by monetary stimulus, a competitive euro, falling commodity prices and pent-up demand. Consumers will continue to benefit from low inflation and a steady recovery in employment. The modest investment recovery should gain momentum next year through better profitability, improved credit conditions and rising capacity utilisation.
The ArcelorMittal Group reported steel shipments of 21.1 million tonnes in 3Q 2015, indicating a year-over-year (YOY) decrease of 2.1%, whilst these shipments for 9M 2015 were up 1.4% YOY at 64.8 million tonnes. The Group experienced a net loss of $0.7 billion for the third quarter of 2015, including $0.5 billion exception charge related to the write-down of inventory following the rapid decline of international steel prices.
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