The shock loss sent Evraz shares down by 16 per cent to an all-time low in London trading, before they recovered to close down 11.4 per cent, making it the biggest faller on the FTSE 100 index.
Steelmakers across the world have been struggling to cope with weak prices as a growth slowdown in China and Europe’s debt crisis hit construction and industrial production. Demand from European Union countries alone slumped nine per cent last year.
Evraz, controlled partly by Chelsea FC owner Roman Abramovich, posted a 2012 net loss of $335m (£217m) compared with profit of $453m the previous year. Analysts on average had expected a net profit of $43m.
The firm said a $413m impairment of its iron ore division was a key contributor to the 2012 loss.
“Notwithstanding some recent signs of stabilisation, global prospects remain fragile, with strong downside risks and volatility likely to persist throughout the year,” chief executive Alexander Frolov said in a statement to the market.
Evraz said it planned to reduce capital expenditure by 10 per cent in 2013 as it winds up various investment projects.
The firm said it might sell its Czech unit Vitkovice Steel or sell the entire business.
While the net loss contrasted with the net profit forecast by analysts, Evraz’s 2012 revenue of $14.7bn – down 10.2 per cent on a year earlier – was in line with expectations.