The main reason for the losses was $5 billion in write-downs on plants, nearly all of them in Europe, the company said.
Thomas O’Hara, an analyst at Citi in London called the results “operationally weak” in a note, but said that 2013 was likely to see better results.
ArcelorMittal previously announced the long-term idling of blast furnaces at Florange, France, various facilities at Liège, Belgium, and electric arc mills in Spain and Luxembourg as part of what it calls its “asset optimization” program designed to achieve $1 billion in annual savings.
The company said Wednesday that “the essential components” of this program had now been announced, indicating that the major elements of its downsizing in Europe have now been made public.
“2012 was a very difficult year for the steel industry, particularly in Europe where demand for steel fell a further 8.8 percent,” Lakshmi N. Mittal, the company’s chairman and chief executive, said in a statement.
He added that the company had “recently seen some positive indicators” which, along with measures taken to reduce costs, he expected to lead to an improvement in the business this year.
The idlings and closures led to tensions with labor unions and a showdown with the government of President François Hollande over the closure at Florange, which employs 2,000 workers. The French government had threatened to nationalize the facility. ArcelorMittal agreed to invest €180 million, or $234 million, in the site but indicated that the two blast furnaces would remain closed.
ArcelorMittal has been hit particularly hard in Europe, where the company has about half of its global workforce and makes close to half its steel. The key flat carbon Europe unit, which supplies the beleaguered auto industry, reported a $2.9 billion operating loss for the fourth quarter, making an average loss of $487 on every metric ton it produced.
Despite the company’s struggles, which have included downgrades of its debt to junk status, ArcelorMittal is still able to raise money in the markets. Last month it quickly raised $4 billion through an offering of shares and convertible notes in an effort to reduce net debt, which it forecasts will be $17 billion in June.
ArcelorMittal is cautiously forecasting an improvement this year, saying that steel shipments are likely to increase by 2 percent to 3 percent and operating earnings improve. The company continues to focus its new investments on mining rather than steel. The company announced Wednesday that the board had approved a $1.5 billion expansion of its iron ore mine in Liberia.
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