ArcelorMittal plans $1 billion cost cuts under new CEO

By Marine Strauss BRUSSELS (Reuters) - ArcelorMittal, the world's largest steelmaker, plans to cut 20% of its office staff in a $1 billion cost-reduction plan, it said on Thursday after posting higher than expected fourth-quarter earnings and boosting returns to shareholders. The group also announced that finance chief Aditya Mittal will take over as chief executive from his father Lakshmi, who founded the company in 1976 and will become executive chairman

Reuters February 12, 2021 00:07:20 IST
ArcelorMittal plans $1 billion cost cuts under new CEO

ArcelorMittal plans 1 billion cost cuts under new CEO

By Marine Strauss

BRUSSELS (Reuters) - ArcelorMittal, the world's largest steelmaker, plans to cut 20% of its office staff in a $1 billion cost-reduction plan, it said on Thursday after posting higher than expected fourth-quarter earnings and boosting returns to shareholders.

The group also announced that finance chief Aditya Mittal will take over as chief executive from his father Lakshmi, who founded the company in 1976 and will become executive chairman.

"We have worked closely together since he joined the company in 1997, indeed in recent years we have effectively been managing the company together," Lakshmi Mittal said in a statement. The Mittal family owns more than 35% of the company.

ArcelorMittal, which employs about 190,000, said it would run a $1 billion cost-cutting programme over the next two years which will include boosting productivity, cutting contractor numbers and reducing office staff by a fifth.

Chairman Lakshmi Mittal said market conditions had improved in the fourth quarter, and the company now forecasts 4.5-5.5% growth in steel demand this year.

For the year ahead, new CEO Aditya Mittal told a conference call that customers were rebuilding steel inventories and end-user demand was recovering following summer lockdowns.

Germany's Thyssenkrupp on Wednesday raised its full-year outlook for the first time in nearly four years, boosted by a recovery at its steel unit.

ArcelorMittal said it would resume dividend payments, of $0.30 per share, and would return a further $570 million to shareholders through a new share buyback programme in addition to a $650 million buyback announced on Tuesday.

The Luxembourg-based group’s shares were down 0.5% at 19.12 euros by 0855 GMT, but have recovered strongly from mid-2020 when they were below 10 euros.

ArcelorMittal also said the impact of the second wave of COVID-19 had so far been limited on its customers in the manufacturing, construction and automotive industries.

Analysts at Jefferies said solid earnings and the new shareholder returns policy should be welcomed by the market.

Fourth-quarter core profit almost doubled to $1.73 billion, beating an average forecast of $1.47 billion in a company poll of analysts.

(Reporting by Marine Strauss @StraussMarine; Editing by David Goodman and Jan Harvey)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.