APEMY Aperam New York Registry (PK)

Stainless steel maker Aperam (APAM.AE), a recently spun-off unit of steel giant ArcelorMittal (MT), Tuesday reported a fourth-quarter net profit of $2 million after a $12 million net loss a year ago, on sales of $1.43 billion.

For the full year, the company posted a net profit of $104 million, from a $150 million net loss in 2009. It also reported an operating profit of $93 million, from an operating loss of $207 million in 2009.

Aperam said volumes of steel sold and prices will improve in the first quarter compared with the fourth quarter, boosting cashflow and working capital requirements.

Chief Executive Bernard Fontana said the pricing levels will stay "moderate" in 2011 as a result of the excess of the industry's production capacity.

Inigo Recio, an analyst covering the steel industry for Spain's Caja Madrid, said he expected the company's profit would be "a little higher". He said the demand for stainless steel will surely improve as European economies are slated to grow faster, though the over-capacity and imports from Asia will keep a cap on prices.

Aperam's shares, listed in Amsterdam, were up 0.9% at EUR29.75.

Caja Madrid's Recio said Aperam is getting a lot of cashflow from its operation in Brazil. However, earnings before interest, taxes, depreciation and amortization at the Brazilian unit fell to $17 million in the fourth quarter from $62 million in the third quarter.

ArcelorMittal spun off its stainless steel division in January, listing the newly-named company Aperam this year.

Aperam has 2.5 million metric tons of flat stainless steel production capacity in Europe and Brazil and the company plans to carry out a important cost-cutting program in the coming months.

-By Inti Landauro, Dow Jones Newswires; +33 1 4017 1740; inti.landauro@dowjones.com

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