Top world steelmaker ArcelorMittal said Friday it was taking a roughly $4.3-billion (3.25-billion-euro) charge to reflect the fallen value of its European operations due to weaker demand in the region.
The company said the non-cash charge would be taken in the fourth quarter was "due to a weaker macro economic and market environment in Europe where apparent steel demand has fallen by approximately 8 percent this year, bringing the cumulative demand decline to approximately 29 percent since 2007."
ArcelorMittal said net debt and operating profit, as well as compliance with debt covenants, would be unaffected by the impairment.
However the writedown will affect the company's net profit, which it is due to report on February 6.
International accounting rules oblige companies to periodically adjust in their accounts the value of their assets to the current market value.
ArcelorMittal said the weaker demand environment in Europe, and expectations that it will persist over the near and medium term, led to a downward revision of the value of its European businesses.
In contrast, ArcelorMittal said US steel consumption is up by 8 percent this year and is now just 10 percent below its level in 2007 when the global financial crisis began to set in.
ArcelorMittal reported a third quarter net loss of $709 million and said that cutting its massive debt, which hit 23.2 billion at the end of September, was now a top priority.
ArcelorMittal's shares dropped more 3.10 percent in early trading to 12.80 euros when the Paris CAC 40 index was down 0.18 percent.