Australian mining and metals group Arrium has announced a $474m ($488.62m) impairment charge due to weak construction markets and a strong Australian dollar.
The company said it will write down A$431 million on its manufacturing segment and A$43m on its distribution assets.
Arrium said in a statement that while it has delivered a significant turnaround in the performance of its manufacturing business, "the Board decided to write down goodwill in manufacturing having regard to the impact of an increase in market consensus for the Australian dollar, as well as a forecast continuation of the difficult external environment and generally weak construction markets.
The manufacturing writedown includes all of the goodwill associated with its Australia Tube Mills business, noting that it "does not expect to realise this value on a sale of the business."
The impairments are non-cash in nature and have no impact on operations, Arrium said..
The writedown increases Arrium’s gearing ratio by 2.6 percentage points, while the company said that it is ‘comfortable with its banking covenants.’
Several steelmakers in Australia have faced challenging market conditions in the past two years due to lower steel prices and a stronger currency, which in turn cut down profits.