The slump in commodities prices has taken its toll on the world’s largest steelmaker, ArcelorMittal, pushing it into an annual loss of nearly $8bn (£5.5bn).
The shares slumped 7.4% to €3.41(£2.60) on the Paris stock exchange, as its chief executive predicted another difficult year.
ArcelorMittal said it was raising $3bn through a rights issue to shore up its finances, with the Mittal family committed to take up its pro-rata stake of $1.1bn. It also sold its 35% stake in the Spanish company Gestamp, which makes steel parts for carmakers, for $979m.
The company ran up a net loss of $7.95bn in 2015, after $1.86bn the previous year. Sales fell 20% to $63.6bn, with the company producing 92.5m tonnes of steel and 62.8m tonnes of iron ore over the year.
In the fourth quarter, sales fell 25% year-on-year due to a 22.6% fall in average steel selling prices, a 6.8% decline in steel shipments and a 37% slump in iron ore prices. The company is pushing ahead with cost reductions.
More than half the annual loss was the writedown of its mining operation. There were further exceptional charges related to the writedown of inventory following the “rapid decline of international steel prices”, the company said. Stripping out one-off items, ArcelorMittal was still in the red with a $300m loss, compared with $400m in 2014.
Chief executive Lakshmi Mittal said: “2015 was a very difficult year for the steel and mining industries … prices deteriorated significantly during the year as a result of excess capacity in China. Throughout the year we have rigorously focused on implementing a series of measures aimed at reducing costs and ensuring the business is adapted for these tough market conditions.”
He said the mining business had slashed cash costs by 20%, more than the initially targeted 15%, and will cut costs a further 10% this year. He set out an “Action 2020 plan” to get the company back on track.
Mittal added: “Looking ahead, although we have started to see a recovery in Chinese steel spreads from 2015 lows, 2016 will be another difficult year for our industries. It is clear that China has a challenge to restructure its steel industry for a lower growth economy but we are somewhat encouraged by recent comments concerning capacity closures.”