World's largest steel maker ArcelorMittal today announced a plan to save $3 billion by 2015 through optimising its assets and other cost cutting measures.
Moreover, the company would be reducing its net debt levels sharply by about $4.8 billion by June this year, it said in a statement, adding that it has kept a medium term net debt target of $15 billion.
The company, which was celebrating its annual investor day today, did not specified the time line for medium term target.
"(It) confirms a mid-2013 net debt target of approximately $17 billion and a medium-term net debt target of $15 billion and specify that growth capex and dividends will not be increased until this medium-term target has been achieved," the company said.
The new target is aimed at increasing its core profits (EBITDA- earnings before income, tax, depreciation and amortisation) $150 per tonne. The EBITDA per tonne had declined to $85 per tonne last year.
Company's CFO Aditya Mittal said in a presentation that "If our markets expand by 15 per cent i.e (company's) global shipments (get) back to above 95 million tonnes, then we believe $150 per tonne EBITDA is achievable."
Talking about the cost cutting programme, he said that "through new management gains programs, we are targeting to more than offset the effect of inflation on fixed costs, minimise the effect of higher activity (production) on fixed costs and achieve further variable cost efficiencies."
Noting that "cost cutting is in our DNA", Mr Mittal said that a similar programme of achieving $4.8 billion of "management gains" since 2008 has already been achieved.
Talking about the outlook, the company said that it expects global apparent steel consumption to increase by 3-3.5 per cent this year.
It further said that ArcelorMittal's progress in increasing iron-ore production capacity to 84 million tonnes, including the Phase 2 expansion in Liberia and the commencement of the Early Revenue Phase (ERP) for Baffinland in Canada is on track.