ArcelorMittal posts $3.73-b loss

ArcelorMittal posts $3.73-b loss in 2012

PTI

LUXEMBOURG/NEW DELHI, FEB 6: 

ArcelorMittal, world’s largest steelmaker, has gone into the red with a net loss of $3.73 billion in 2012 largely due to a $4.3 billion write down related to company’s European businesses.

It had posted net profit of $2.26 billion in 2011. Operating profit or EBITDA (earnings before interest, taxes, depreciation and amortisation) also fell by 30 per cent to $7.08 billion in 2012 vis-a-vis $10.11 billion in 2011, ArcelorMittal said in a statement. The company’s sales too were down 10.39 per cent to $84.21 billion in 2012. However, ArcelorMittal gave a positive outlook for 2013, saying it expects higher EBITDA and 2-3 per cent increase in steel shipments in 2013. It is also expecting “marginal” improvement in per-tonne steel margins in 2013 as it hopes to reap full benefits of asset optimisation plan that has already been completed during the second half of 2013. “2012 was a very difficult year for the steel industry, particularly in Europe where demand for steel fell a further 8.8 per cent... Although we expect the challenges to continue in 2013, largely due to the fragility of the European economy, we have recently seen some more positive indicators,” the company’s Chairman Lakshmi Mittal said.

He added that various measures taken last year to strengthen company’s businesses, including reducing capacities and net debt are “expected to support an improvement in the profitability of our steel business this year“. During the year, ArcelorMittal took a non-cash write down of $4.3 billion with respect to its European businesses. Besides, it also incurred $1.3 billion charges related to optimisation of its assets. “The $4.3 billion goodwill impairment is due to the weaker macroeconomic and market environment in Europe where apparent steel demand fell approximately 9 per cent in 2012, bringing the cumulative demand decline to approximately 29 per cent since 2007,” the company said.

It added that “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 had been allocated“. Quarter-on-quarter basis, ArcelorMittal’s net loss widened to $3.98 billion in October-December, 2012 vis-a-vis $1 billion of the same quarter of 2011. The sales were down 14 per cent to $19.31 billion, while EBITDA fell nearly 23 per cent to $1.32 billion in the fourth quarter. The company also forecast that European steel consumption would be 1 per cent lower this year than in 2012. However, it expects a growth of 3 per cent in the Chinese market and 5 per cent in Brazilian market in 2013.

Besides, ArcelorMittal is planning to increase iron ore shipments by 20 per cent. The expansion of its mines in Canada to 24 million tonnes per annum is on track and expected to be completed during the first half of 2013, it said. The company is also hopeful of reducing its net debt to $17 billion by June 30 due to a slew of measures. It is expecting to garner $5 billion from fund raising exercise completed in January, and 15 per cent stake sale in Canadian iron ore mine to Posco and China Steel Corporation. As on December 31, 2012, the company had a net debt of $21.8 billion. For 2013, the company has set a capex of $3.5 billion on various operations and expansion plans. However, it has proposed to reduce the dividend for 2013 by about 74 per cent to $0.20 per share against $0.75 per share of 2012.

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sugar decontrol..on the cards...NOW....

6 FEB, 2013, 04.00AM IST, RITURAJ TIWARI,ET BUREAU 

Food ministry seeks cabinet approval for sugar decontrol

NEW DELHI: The food ministry has decided to seek Cabinet approval to lift controls on sugar, the first time such a proposal will be taken to the highest decision-making body of the government since the sector was brought under strict regulation 50 years ago.The politically sensitive move to deregulate sugar, one of the last bastions of state controls after two decades of economic liberalisation, follows bold moves last year, such as allowing more foreign direct investment in the retail sector and substantially increasing diesel prices along with the declaration that prices of the fuel will be raised gradually to international levels. Sugar decontrol was strongly recommended last year by a committee led by C Rangarajan, the influential head of the economic advisory council of the prime minister. The government has already accepted another report by Rangarajan, which proposes far-reaching changes in the oil sector. 

Four other committees since 1998 have suggested diluting the Sugar (Control) Order of 1963, but the proposal was never sent to the Cabinet because of fears of a political backlash. "We will soon send a proposal to the Cabinet, asking for removal of state curbs as recommended by the Rangarajan committee," a senior food ministry official told ET. The official said the government is keen to abolish the system of telling sugar mills how much of the sweetener they can release in the market. It also wants to stop the system of levy sugar, which forces millers to sell a part of their output at below-market prices. 
Sugar industry officials, who have been pitching for decontrol, welcomed the move. "Presently, mills are allocated sugar quota for four months depending on their production capacity. If the Cabinet approves the proposal, sugar mills will be free to sell sugar as per their commercial interests and demand in the market," said Abinash Varma, director-general of the Indian Sugar Mills Association, and a former bureaucrat in the food ministry. 
Currently, mills have to sell 10% of total production to the government at Rs 19.01 per kg, a fraction of the wholesale market price of Rs 34 per kg, for public distribution through ration shops. 

"The government will have to buy sugar at market price from mills. This will give liquidity of around Rs 2,500 crore to more than 500 sugar mills, including Shree Renuka SugarsBSE 0.35 %, Balrampur ChiniBSE -0.86 %and Bajaj Hindusthan," the food ministry official said. The withdrawal of levy obligation, however, would shift the subsidy burden, presently borne by industry, on the government for supplying cheaper sugar to poor families. The government supplies around 2.7 mt to poor families and defence forces at rates much below the market price bearing a subsidy burden of Rs 2,300-2,500 crore a year. Poor families get 500 gm to 1.3 kg of sugar per person per month from ration shops at Rs 13.50 a kg - a rate that has not been revised since 2001-02. "In this case, the government would buy sugar for public distribution through tenders. The company quoting lowest price will get the contract and the Centre will bear the price difference," the official said.
http://economictimes.indiatimes.com/news/news-by-industry/cons-products/food/food-ministry-seeks-cabinet-approval-for-sugar-decontrol/articleshow/18358170.cms