Melbourne (Platts)--7Feb2013/529 am EST/1029 GMT
A high Australian dollar and weak demand in Australia's steel industry has seen Arrium Ltd take a A$474 million (US$489 million) writedown of its steel assets, which includes an impairment of A$431 million at its steel manufacturing unit and A$43 million at its distribution segment, the company said late Wednesday. Arrium said the company has chosen to write down these assets due to "the impact of an increase in market consensus forecast for the Australian dollar, as well as a forecast continuation of the difficult external environment and generally weak construction markets." The manufacturing writedown includes the goodwill for its Australian Tube Mills, as Arrium said it does not expect to realize the value on a sale of this business. The writedown in distribution relates to the carrying value of the company's mid-market ARC steel reinforcing brand. "These impairments are non-cash in nature and have no impact on operations," Arrium said, adding that it expects to provide further details when it releases its financial results for its half year ended December 2012. Article continues below...Request a free trial of: Steel Markets DailySteel Markets Daily provides transparent daily and weekly assessments of iron ore, coking coal, coke, ferrous scrap and ferroalloys prices, plus insightful analysis and commentary on the day's market activities.
A high Australian dollar and weak demand in Australia's steel industry has seen Arrium Ltd take a A$474 million (US$489 million) writedown of its steel assets, which includes an impairment of A$431 million at its steel manufacturing unit and A$43 million at its distribution segment, the company said late Wednesday. Arrium said the company has chosen to write down these assets due to "the impact of an increase in market consensus forecast for the Australian dollar, as well as a forecast continuation of the difficult external environment and generally weak construction markets." The manufacturing writedown includes the goodwill for its Australian Tube Mills, as Arrium said it does not expect to realize the value on a sale of this business. The writedown in distribution relates to the carrying value of the company's mid-market ARC steel reinforcing brand. "These impairments are non-cash in nature and have no impact on operations," Arrium said, adding that it expects to provide further details when it releases its financial results for its half year ended December 2012.
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Steel Markets Daily provides transparent daily and weekly assessments of iron ore, coking coal, coke, ferrous scrap and ferroalloys prices, plus insightful analysis and commentary on the day's market activities.
Arrium, formerly known as OneSteel, rejected a A$1.2 billion takeover offer from a consortium led by Posco and Noble Group in October last year saying the offer was too low. However, Arrium said at the time it would consider any future takeover offers that would be beneficial for the company's development.--Marnie Hobson, marnie_hobson@platts.com--Edited by Lisa Miller, lisa_miller@platts.com
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