Mittal Steel expects to raise core earnings by more than $4 billion over the next three years, it said on Tuesday, as it published a business plan intended to secure a takeover of rival Arcelor.
AMSTERDAM/LONDON: Mittal Steel expects to raise core earnings by more than $4 billion over the next three years, it said on Tuesday, as it published a business plan intended to secure a takeover of rival Arcelor.
The world's biggest steel producer, whose cash and shares offer for its Luxembourg-based rival is currently worth around 21.5 billion euros ($27.1 billion), said earnings before interest, tax, depreciation and amortisation (EBITDA) should reach $9.9 billion in 2008, from $5.8 billion in 2005.
This forecast does not include the potential acquisition of Arcelor, which on Monday rejected Mittal's latest bid despite seeing the Dutch-based firm's earnings forecasts.
Arcelor's board favours an alternative tie-up with Russia's Severstal. But on Monday it bowed to investor demands for a special vote which could derail that deal, and said it would talk to Mittal about a possible improved offer.
Mittal, 87 per cent owned by the family of billionaire Lakshmi Mittal, has said it would make further improvements on corporate governance, but has ruled out improving the financial terms of its bid.
Mittal, which has led consolidation in the fragmented steel industry, is aiming to create a producer of more than 100 million tonnes of steel a year -- more than three times its closest rival -- by combining the sector's two biggest players.
The firm said on Tuesday it expects to post EBITDA of around $7.3 billion this year, including a second-half contribution of between $4.2 billion and $4.4 billion. Shipments for 2006 were likely to be around 60 million tonnes, it added.
''The outlook for the steel industry is positive, supported by strong global growth, especially from high-growth, developing markets,'' Lakshmi Mittal said in a statement.
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