The world's largest steelmaker ArcelorMittal reported a huge loss on Feb. 11 for the last quarter of 2008 and said it would slash production and jobs this year as demand plummets.
For the final three months of 2008, the group reported an operating loss of $3.5 billion on falling demand and writedowns on stock compared with an operating profit of $3.3 billion in the year-earlier period.
Net losses were $2.6 billion and sales fell 37% to $22.1 billion as demand plummeted from the key auto and construction sectors.
"The decline resulted from a collapse in demand for steel products and a sharp fall in prices in the fourth quarter as a result of the global economic crisis," the company said in a statement.
In response, ArcelorMittal cut production by 45% in the fourth quarter and will continue to reduce output in the first quarter until stocks have been used up, Chief Financial Officer Aditya Mittal said.
The group is also implementing a voluntary redundancy program to cut 9,000 jobs or 3% of its global workforce, but the measures might be extended resulting in more layoffs, he added.
The steel industry worldwide, which is a highly cyclical industry, has been hard hit by the sharp fall in the global economy since the financial crisis erupted in late 2008.
Lakshmi Mittal, chairman and chief executive of ArcelorMittal, said the operating climate was "likely to remain challenging for the first quarter" but he said the company was "starting to see some signs of improvement."
Mittal said the first quarter would be the worst period of 2009 for the company before an improvement in the second quarter.
The heavily-indebted group, which was formed by a takeover by Mittal of Arcelor in 2007, said it reduced its net debt by $6 billion to $26.5 billion in the fourth quarter.
For 2008 as a whole, the group reported a net profit fall for the year to 9.4 billion dollars.
Sales rose by 19% to $124.9 billion because market conditions at the beginning of the year had been strong.
Copyright, Agence France-Presse