OneSteel (ASX:OST), an integrated steel manufacturer and iron ore miner based in Australia, dropped 18% to 98.5 cents a share after the company gave a gloomy financial forecast as it tries to cope with falling iron ore prices and a rising Australian dollar.
“OneSteel announced today that its earnings for the first half of the 2012 financial year are expected to be adversely impacted by the recent severe fall in iron ore prices and the rapid run up in the Australian dollar,” said the company in a statement.
The company says it is struggling since iron ore prices collapsed 30% from levels of just $170 per tonne three weeks ago.
“OneSteel now expects Net Profit After Tax for the first half will be in the range of $55 million to $75 million (excluding transaction costs and stamp duty in relation to the acquisition of WPG Resources’ iron ore assets of approximately $20 million).”
OneSteel has revenues of $7 billion and employs 11,000 people.
