London - For billionaire Lakshmi Mittal, what one hand gives, the other takes away.
On Thursday, he gained the prospect of millions in dollars in payouts on his shareholding in stainless-steel producer Aperam after it announced a resumption of dividends. A day later and the chief executive officer of ArcelorMittal is set to lose about $130 million in payments after the world’s biggest steelmaker suspended its dividends.
He owns about 40 percent of both companies.
Aperam surged 18 percent on Friday, the steepest intraday gain since May 2014, as the company, spun off by ArcelorMittal, said after the close of trade the day before that it would offer a base dividend of $1.25 a share. It scrapped its dividend in 2013.
Unthinkable dividend
The producer, in its third-quarter earnings, said it sees stainless-steel markets improving and is confident of sustainable cash returns. Aperam rose 4.92 euros to 32.83 euros by 1:09 p.m. in Amsterdam trading.
The decision comes at a time when metals and mining rivals are cutting or scrapping their payments as a weakening economy in China, the biggest consumer, collapses profits. Mine operators Glencore Plc and Vedanta Resources are among those who halted payments.
“Aperam announced the unthinkable within the global steel industry; a new progressive dividend policy,” Seth Rosenfeld, a Jefferies International analyst, said in London.
ArcelorMittal on Friday cut its annual profit target after reporting a 29 percent slump in third-quarter earnings, with Mittal saying in a statement that “already challenging operating conditions have further deteriorated.”
In comparison, Aperam said its quarterly earnings would be sustained in the next three months. Its shares are up about a third this year as the stainless industry benefited from plant shutdowns and curbs on output lacking in the much bigger carbon- steel business.
BLOOMBERG