SSAB's board revises financial targets.
M2 EQUITYBITES-December 15, 2017-SSAB's board revises financial targets
(C)2017 M2 COMMUNICATIONS http://www.m2.com
Steel company SSAB AB (STO: STO: SSABA) announced on Thursday the decision by its board of directors to revise the company's financial targets.
Under this revision, dividends will constitute 30% to 50% of profit after tax, as compared with the prior 50% over a business cycle. Also, the net debt/equity ratio will not normally exceed 35%, as compared with the prior target of a long-term ratio of 30%.
SSAB's goal to achieve industry-leading profitability remains unchanged. This is defined as profitability measured as the highest EBITDA margin among the comparable peers of ArcelorMittal, AK Steel, Nucor, Salzgitter, Tata Steel Europe, Thyssenkrupp and US Steel.
According to SSAB, its prior financial targets were set in March 2015, after which the synergies from the combination with Rautaruukki, as well as other cost reductions have resulted in a considerably lower cost base and greater flexibility.
In addition, the rights issue in April 2016 coupled with strong cash flow generation has strengthened the balance sheet.
Given this background, SSAB has revised targets to give the company greater room for future strategic initiatives to promote growth and profitability.
((Comments on this story may be sent to email@example.com))