Salzgitter AG (SZG.XE), Germany's second-largest steelmaker by output, late Wednesday reported a hefty pretax loss for the full-year 2009, missing its target to reach break-even in the year ended Dec. 31, due mainly to a considerable increase in impairment charges.

The company added, however, that restructuring measures and the impairment charges as well as an overall economic stabilization "at a low level" should help to "ease the burden on the result" as early as 2010.

The steel industry had been badly hit in 2009 by the global economic crisis, which saw a massive slump in demand from key customers in the automotive, appliance and construction industries.

Some steelmakers have, however, expressed slightly more upbeat expectations for their business, with ArcelorMittal (MT), the world's largest steelmaker by volume, earlier this month saying it expects to increase its global production capacity utilization rate in light of increasing demand.

ThyssenKrupp AG (TKA.XE), Germany's largest steelmaker by output, last week reported better-than-expected quarterly results helped by rising demand, higher prices for some of its products and increased productivity coupled with a comprehensive reorganization of its business and drastic cost-cutting.

German crude steel production is expected to rise 10% to 15% in 2010 after falling by a record 28% in 2009, according to the country's steel association Wirtschaftsvereinigung Stahl.

Salzgitter Wednesday said that, according to preliminary estimates, it recorded a pretax loss of around EUR495 million, swinging from a EUR1 billion pretax profit in 2008.

The company said that impairment charges in 2009 totaled around EUR260 million, up considerably from the EUR37 million after the first nine months of the year. The impairment charges were mainly booked in the company's Steel, Technology and Tubes divisions, Salzgitter said.

Around EUR75 million in restructuring charges, also mainly in the three divisions, further burdened the result in 2009, Salzgitter said.

Operating pretax loss, which includes a EUR60 million contribution from its stake in copper company Aurubis AG (NDA.XE), is expected to come in around EUR160 million, the company said in a written statement.

It added that operating pretax loss also included "overall positive valuation-related effects in the context of preparing the annual financial statements."

The company didn't publish fourth-quarter results, but a Dow Jones Newswires calculation showed that Salzgitter's pretax loss adjusted for the impairment charges in the three months to Dec. 31 was around EUR11 million.

The company's shares Wednesday closed 1.1% higher at EUR64.99, in line with a broadly firmer market.

Salzgitter will report results for 2009 and further details on March 5, it added.

-By Frankfurt Bureau, Dow Jones Newswires; +49 69 29725 500; djnews.frankfurt@dowjones.com
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