ArcelorMittal Posts Quarterly Loss, Reduces Dividend

on Oct 31, 2012

On 31 October 2012, ArcelorMittal (NYSE:MT, AMS:MT), the world’s largest producer of steel, published its quarterly results for the period ended September 30. The results indicate that the company slipped into net loss in the third quarter, with ArcelorMittal’s chairman, CEO and main shareholder Lakshmi Mittal attributing the results to “challenging operating conditions.”

**Net Debt Increase**
As noted in the company’s press release, ArcelorMittal’s net debt increased by $1.2 billion during the third quarter, (£764 million), to a total of $23.2 billion, driven by negative operating cash flow, as well as by negative foreign exchange impact. The company reports that the fall in iron ore impacted adversely both steel prices and steel volume.

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!m[](/uploads/story/677/thumbs/pic1_inline.png)In the company press release, Mr Mittal noted that in the third quarter of 2012, the “already fragile global economy” was further impacted by the slowdown in China. “This resulted in very challenging operating conditions for ArcelorMittal, which are expected to continue in the fourth quarter.”
**The Steel Maker Focuses on Cutting Debt**

With the fourth quarter outlook negative, the company also announced that it was reducing its annual dividend from 2013 to $0.20 per share, relative to $0.75 per share payable in 2012. The company said it would focus on net debt reduction, asset optimisation and improvements in efficiency and productivity.
At the beginning of October, ArcelorMittal announced the permanent closure of a part of a French plant and was recently reported as exploring the option of selling a stake in its Canadian iron ore business.


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