ArcelorMittal has second consecutive quarterly loss for 1Q 2009

By Andrea Holecek, Times of Northwest Indiana
andrea.holecek@nwi.com

Steel giant ArcelorMittal lost $1.1 billion in the first quarter 2009 following a loss of $2.63 billion in the previous period as the slumping global steel market continued.

"We are in the midst of the deepest recession in our lifetime," said CEO Lakshmi Mittal during a conference call with analysts Wednesday.

The Luxembourg-based company's recent quarterly loss partially resulted from $1.2 billion in pre-tax charges from writing down high-priced inventory, company officials said.

The company, which has facilities in East Chicago, Portage and Riverdale, Ill., shipped 16 million long tons during the first quarter, a 6 percent drop from the fourth quarter 2008. First quarter sales of $15.1 billion were 32 percent lower than the previous period.

"Strong measures have been taken to reduce our cost considerably, and liquidity remains healthy with an extended debt maturity profile," Mittal stated in the company's earnings release. "Although market conditions remain challenging, a technical recovery is inevitable, and ArcelorMittal will benefit from this."

The company, which is operating at 50 percent of utilization, will continue its temporary production cuts to keep it in-line with reduced demand by lower operating rates at its high-cost facilities and accelerating production at its low-cost plants, Mittal said.

The company has idled facilities worldwide including at its Cleveland plant. It is closing its facilities in Hennepin, Ill., and Lackawanna, N.Y., and has cut production at it's Indiana Harbor and Burns Harbor mills.