ArcelorMittal (NYSE:MT) announced on Wednesday that it may slash its 2013 dividend in order to reduce expenses in the face of falling global steel prices and posted a third-quarter loss.
The worldwide steelmaker said that next year’s dividend would fall to 20 cents a share, compared to the 75 cents a share it will pay in 2012. The lower dividend is expected to save $1 billion, the Wall Street Journal noted.
News of the dividend cut comes as the company announced a third-quarter net loss of $709 million, compared to net earnings of $659 million in the same period last year. Quarterly revenue declined 19% compared to last year, falling to $19.72 billion as U.S. and European demand remained soft and Chinese demand for steel slowed.
In August, Standard & Poor’s cut its rating for ArcelorMittal’s debt to junk status. In order to reduce its debt, the steelmaker will shutter under-performing factories, cut capital spending and continue to dispose of assets. Over the last year, the company has sold about $2.7 billion in assets, including a 48% stake in Paul Wurth Group to SMS for $389 million and Skyline Steel to Nucor for $605 million.
Shares of ArcelorMittal slipped fractionally in early Wednesday trading.