* No dividend planned in 2013 or 2014 vs past $0.75 per
* Targets debt reduction to $650 mln from $816 mln
* Expanded cost-savings plan, with $150 mln target in two
* Sees core profit in Q1 higher than in Q4
BRUSSELS, Feb 4 Stainless steel maker Aperam
cancelled its dividend and pledged deeper cost-cutting
to accelerate debt reduction in a tough economic environment
after a sixth consecutive quarterly net loss.
The Luxembourg-based group, which produces in Belgium,
France and Brazil, said it aimed to reduce its debt to $650
million by the end of 2014 from $816 million at the end of last
The company said it had also agreed with lenders to extend
$600 million of loans by a year until March 2015.
Aperam, floated by ArcelorMittal early in 2011,
has relied on a cost cutting plan, called the Leadership
Journey, which has produced $276 million of annual savings since
the start of 2011.
It is now planning to drive through a further $150 million
euros of savings this year and next, pushing its overall target
to $426 million from a previous $350 million.
It is also proposing not to pay a dividend this year or
next. It has given shareholders $0.75 per share in each of the
past two years.
Aperam forecast an improvement of core earnings in the first
quarter from the $43 million euros in the final three months of
last year -- a figure little changed from the level in the third
quarter and in line with the average forecast in a Thomson
Reuters I/B/E/S survey.
Aperam said earlier this month it would be raising the spot
base price for flat stainless steel by 50 euros per tonnes, with
stronger demand in sectors such as energy, water treatment and
Base prices are those agreed with the customer on a monthly,
quarterly or longer basis. Stainless steel sales also include a
monthly alloy surcharge based on the average price a month or
two before a booking.
Stagnant consumption and cheaper imports from Asia have left
Europe with a capacity glut, prompting consolidation such as
Outokumpu's takeover of the stainless steel business
of ThyssenKrupp a year ago.
The industry has also suffered from steadily falling nickel
prices since the start of 2011, but they have pulled off a
November dip and rose 7 percent last week alone.
Distributors stock up when prices rise, and hold off when
they fall in the hope of even cheaper prices in the future.
Chief Executive Philippe Darmayan said that, while the first
quarter should show some improvement, he did not expect a big
change in Europe for the year as a whole.