Steel Maker Takes Huge Writedown

close-up of red hot iron beamsThe world's largest steelmaker, ArcelorMittal (NYSE: MT), said this morning that it would take a noncash $4.3 billion impairment charge against the goodwill of its businesses in Europe. The charge will be posted to the company's fourth quarter of fiscal 2012, which ends this month.

In its announcement the company said:

The impairment is due to a weaker macro economic and market environment in Europe where apparent steel demand has fallen by approximately 8% this year, bringing the cumulative demand decline to approximately 29% since 2007. This weaker demand environment, and expectations that it will persist over the near and medium term, led to a downward revision of cash flow expectations underlying the valuation of the European businesses to which goodwill has been allocated.

ArcelorMittal did not refer to the difficulties it has had with trying to close several furnaces in France and other plants in Belgium. The company is shifting its focus from Europe to the United States, where energy costs are lower and demand is rising.

Shares are down 2.8% in premarket trading this morning, at $17.03 in a 52-week range of $13.28 to $23.62.

Paul Ausick


Filed under: 24/7 Wall St. Wire, Commodities & Metals, Economy, International Markets, Metals Tagged: MT
Read Full Story

Markets

DJIA 21,703.75 29.24 0.13%
NASDAQ 6,213.13 -3.40 -0.05%
S&P 500 2,428.37 2.82 0.12%
NIKKEI 225 19,431.01 37.88 0.20%
HANG SENG 27,339.03 184.35 0.68%
DAX 12,065.99 -99.20 -0.82%
USD (per EUR) 1.18 0.00 0.02%
USD (per CHF) 0.96 0.00 0.04%
JPY (per USD) 109.25 0.31 0.28%
GBP (per USD) 1.29 0.00 0.03%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.