) has announced its plans to permanently close its factory in
Liege, Belgium, given slack demand and weakening European
The company, in Oct 2011, announced the idling of its liquid
phase due to structural over-capacity in Northern Europe. The
production halt at the Liege plant was done to ensure better
focus on the company's downstream activities, operating five core
lines and seven flexible lines.
However, economic conditions worsened since then and demand for
steel in Europe declined 8%-9% in 2012 and is currently 29% below
pre-crisis levels. The Leige business is heavily dependant on the
automotive sector, which faced a major downturn in 2012. As a
result, there is not enough demand to support the facility and
ArcelorMittal stated that it will close six production lines at
Liege that manufacture finished steel products for the auto
industry. It is also closing a coke plant, which produces fuel
for blast furnaces.
The closures are expected to put 1,300 jobs at risk, but
ArcelorMittal said it is committed to finding a socially
acceptable solution, which could involve redeploying the
employees to other operations.
ArcelorMittal, in Nov 2012, posted a net loss of $709 million
or 46 cents per share in the third quarter of 2012 compared with
a net income of $659 million or 19 cents per share a year ago.
The bottom line was hurt by the challenging economic conditions
including the slowdown in China as well as lower steel pricing
and shipments. The company's adjusted loss of 31 cents a share
missed the Zacks Consensus Estimate of earnings of 6 cents.
Revenues declined 18.5% year over year to $19,723 million,
trailing the Zacks Consensus Estimate of $21,189 million. Sales
also declined 12.3% on a sequential basis due to lower steel
shipment volumes and lower average steel selling prices.
Shipments declined 5.7% to 19.9 million metric tons in the
ArcelorMittal currently maintains a Zacks Rank #3 (Hold).
Other companies in the steel industry having favorable Zacks Rank
) with a Zacks Rank #1 (Strong Buy),
Commercial Metals Company
) with a Zacks Rank #2 (Buy) and
) with a Zacks Rank #2 (Buy).
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