Posted at: 10/31/2012 10:42 AM
LUXEMBOURG (AP) - ArcelorMittal, the world's largest steelmaker, slashed its dividend as it slid into a third-quarter loss on the back of a slowdown in China.
ArcelorMittal owns the Minorca Mine in Virginia.
The company reported Wednesday that it made a $709 million loss during the July-September period in contrast to last year's equivalent profit of $659 million and the second-quarter's profit of $959 million. It blamed lower economic growth in China, which is now the world's second-largest economy after years of stellar growth.
Arcelor also said it was committed to reducing its debt and increasing its productivity and efficiency. The Luxembourg-based steel and mining giant saw its debt increase by $1.2 billion during the third quarter, to $23.2 billion, because of negative operating cash flow.
In a conference call with reporters, Aditya Mittal, the company's chief financial officer, said the goal is to get net debt down to $22 billion by the fourth quarter of this year.
He said ArcelorMittal had sold $2.7 billion worth of assets since the euro crisis began three years ago, and it planned to sell still more. He declined to be specific about which assets might be on the auction block.
It's already saving $1 billion by cutting its dividend to 20 cents a share from 75 cents, Mittal said.
While acknowledging that risks remain, Mittal was generally optimistic about the global economy despite ongoing problems in the 17-country eurozone.
He also cautioned about the change in leadership in China and the U.S.'s fiscal difficulties. The U.S. faces a so-called fiscal cliff, whereby a combination of tax increases and budget cuts may become necessary if a budget agreement is not clinched soon. That could result in an economic slowdown in the U.S., where ArcelorMittal is a significant player.
Overall, from a global economic standpoint the indications are that "we have reached the bottom," Mittal said.
For the first nine months of the year, the company reported a net profit of $261 million, compared to $3.2 billion for the first nine months of 2011.
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