Arrium registers $493m impairment charge
Australia’s Arrium Mining and Materials will write down A$474 million ($493 million) in its steel manufacturing and distribution segments, the company said on Wednesday February 6.
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The write-down in manufacturing was due to the strong Australian dollar, difficult external environment and weak construction markets.
The impairment in distribution relates to the carrying value of Arrium’s mid-market ARC steel-reinforcing brand.
Also included in the total impairment is its Australian Tube Mills business, which Arrium is seeking to divest.
“[The company] does not expect to realise this value on a sale of the business,” a statement from the company read.
Arrium said the impairments are non-cash in nature and have no impact on operations.
“The company continues to be comfortable with its banking covenants, including maintaining a very significant level of headroom under its gearing covenant test,” the statement noted.
Arrium is targeting to export 11 million tpy of iron ore by June from the current run rate of 6 million tpy.