ArcelorMittal (AM) is reporting a net loss in the third quarter of $709 million dollars or 46 cents per share, compared to a net income of $959 million or 62 cents in the second quarter and a net income of $659 million or 43 cents in the year-ago period.

“The already fragile global economy was further impacted in the third quarter of 2012 by the slowdown in China,” AM Chair and CEO Lakshmi Mittal said in a statement released today. “This resulted in very challenging conditions for ArcelorMittal, which are expected to continue in the fourth quarter. Against this backdrop, the company is focused on delivering its plan of asset optimization, net debt reduction, and productivity and efficiency improvements.”

Third-quarter developments:

•The Board of Directors is proposing to slash the annual dividend payment by more than two-thirds, to 20 cents per share from 75 cents in 2012, given “the challenging economic conditions and the company’s priority to de-leverage.”

•Net debt increased by $1.2 billion during the third quarter, to $23.2 billion, “driven by negative operating cash flow (including a $300 million investment in working capital) and negative foreign exchange impacts.”

•Steel shipments dropped in the third quarter to 19.9 million metric tons, 8.3 percent below the second quarter and 5.7 percent below the year-ago period.

The company is not expecting to be profitable in the second half of the year. Or according to the statement, the “fall in the iron ore price and the weaker global economic backdrop adversely impacted steel prices and steel volumes as well as the profitability of our mining operations, affecting our previous expectations for group profitability in 2H 2012.”

The company is expecting, on the other hand, to reduce net debt to around $22 million. “De-leveraging is a priority as the company continues to target an investment grade rating,” the statement said.

•Sales of $19.723 billion, compared to $22.478 million in the second quarter and $24.214 in the year-ago. The company attributed the drop chiefly to lower steel shipment volumes and lower average selling prices.

•Shipments of 19.9 million metric tons, compared to 22.8 million in the second quarter and 22.4 million in the year-ago.

•Crude steel production of 21.9 million metric tons, compared to 22.8 million in the second quarter and 22.4 million in the year-ago.

•An operating loss of $49 million, compared to an operating income of $1.101 billion in the second quarter and $1.168 billion in the year-ago. That result was negatively affected by a $72-million one-time signing bonus and post-retirement benefit costs following the ratification of the new three-year contract with the United Steelworkers.

•Operating income of $3 million, compared to $245 million in the second quarter and $193 million in the year-ago.

•Sales of $4.84 billion, compared to $5.359 billion in the second quarter and $5.499 billion in the year-ago. “Sales were impacted by lower steel selling prices in North America, weakening slab pricing, and lower dollar prices in South America due to depreciation of Brazilian Real,” the company said.

•Average selling price of $850 per ton, compared to $881 in the second quarter and $910 in the year-ago.

•Operating income per ton of $1, compared to $43 in the second quarter and $34 in the year-ago.

•Crude steel production of 5.726 million tons, compared to 6.014 million in the second quarter and 5.866 million in the year-ago.

•Shipments of 5.351 million tons, compared to 5.735 million in the second quarter and 5.708 million in the year-ago.

Posted 10/31/2012