The world leader in the steel industry, the ArcelorMittal group, has just unveiled a new cost reduction plan amounting to 820 million euros.820 million and announces that it will resume dividend payments following its higher than expected fourth quarter results.
In this morning's press release, the Group also announced that it expects world steel demand to rise by 4.5 to 5.5% in 2021 and therefore an increase in its steel deliveries.
It thus announces an EBITDA of 1.73 billion dollars or 1.43 billion euros and this indicator is one of the most followed by investors. It should be noted that this amount is equivalent to twice the EBITDA generated by the steelmaker in the fourth quarter of 2019. As far as forecasts are concerned, the consensus is for an average of around 1.47 billion dollars, i.e. 1.21 billion euros.
According to the explanations provided by the group, it is the gradual recovery in demand for steel, with an increase in deliveries and improved margins, but also a net improvement in its mining activities that made it possible to achieve this feat in the fourth quarter.
ArcelorMittal also presented this morning its new cost reduction plan which should enable it to achieve a billion dollars in savings and improve its productivity by reducing its administrative staff by 20%. This plan should be achieved at best by 2022.
At the same time, the company has published interesting information for shareholders, indicating that it will resume paying a dividend with a first payment of USD 0.30 or EUR 0.25 per share next June. Shareholders will also receive an additional USD 570 million or 470 million euros through a share buyback program in 2021.
Finally, the latest announcement made this morning by the steel group concerns the appointment as CEO of the current CFO Aditya Mittal, who will succeed his father, Lakshmi Mittal.
With the growth of the electric vehicle sector, whose batteries are made of nickel, the demand for this metal is likely to explode in the coming years, with a projected increase to almost one million tons by 2030 compared to 10,000 tons today.
However, the main deposits are now located in Indonesia, and industrialists fear that the projects underway will not be sufficient to meet this demand effectively. For example, the American group Tesla has entered into discussions with a competitor of ArcelorMittal, BHP, with the aim of securing sufficient supplies.