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Arcelor-Mittal to return $2.4 billion via dividend, buybacks despite profit fallnews
22 February 2007

Mumbai: Arcelor-Mittal proposes to distribute $2.4 billion to shareholders via dividend and share buybacks even as the steelmaker reported a 3.5 per cent fall in 2006 net income due to a higher tax rate.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 2.1 per cent to $15.27 billion in 2006 - well within the company''s own target range of $15.2-15.4 billion though below analysts'' expectations of $15.32 billion.

The Luxembourg-based company said its annualised profit fell to $7.97 billion from $8.26 billion, which it blamed on a higher tax levy of $1.7 billion paid in 2006 compared to $1.4 billion in 2005.

Fourth quarter earnings stood at $2.37 billion, or $1.71 a share, compared to $2.18 billion, or $1.57 a share, in the third quarter. Sales rose five per cent to $23.3 billion. The company generated $4.3 billion in cash and reduced debt by $2.3 billion.

Chief executive Lakshmi Mittal said the group is on track to deliver $500 million in the first quarter on post merger synergies and that the companies expect to complete the merger later this year.

Arcelor-Mittal said it expects first-quarter EBITDA of $4 billion to $4.2 billion, while overall shipment levels are forecast in line with fourth-quarter levels. It added it expects the performance of its long carbon units in the Americas and Europe to improve.

The full-year performance of Arcelor-Mittal - which ranks as a global steelmaker three times the size of its nearest rival Nippon Steel - paled in contrast to that of German rival ThyssenKrupp AG, which in December posted a 58 per cent jump in 2006 net income.

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Arcelor-Mittal to return $2.4 billion via dividend, buybacks despite profit fall