BRUSSELS (Reuters) - ArcelorMittal, the world’s largest steelmaker, gave an upbeat assessment of the steel market in 2018, and resumed dividend payments while steering cash more towards debt reduction.
The company, which had skipped a dividend for the past two years, said on Wednesday it would pay out $0.10 from its 2017 results, although this was lower than the average analyst expectation of $0.30.
The group said it would need more cash in 2018 because of a series of projects, including the planned purchase of Italian steel mill Ilva. It would also seek to reduce net debt further, to $6 billion from $10.1 billion at the end of 2017.
The group said it expected global apparent steel consumption, which excludes the impact of inventory changes, to increase by 1.5 to 2.5 percent in 2018, boosted by a strong recovery in Brazil and growth in Europe and North America.
Global demand growth last year was estimated at 3.2 percent.
Growth of demand this year in China, the world’s largest producer and consumer of steel which is battling overcapacity issues, would be between plus and minus 0.5 percent, ArcelorMittal said.
China has cut steel capacity by 115 million tonnes over the past two years, not far from the total target of as much as 150 million tonnes for the 2016 to 2020 period.
Last week, South Korean steelmaker POSCO said it saw higher sales in 2018 supported by strong Chinese steel prices early this year thanks to Beijing’s efforts to cut production.
Overall, ArcelorMittal’s core profit (EBITDA) rose by more than a third in 2017 to $8.41 billion, just above the $8.315 billion expected in a company-compiled consensus.
Reporting by Robert-Jan Bartunek; editing by Philip Blenkinsop