BRUSSELS: ArcelorMittal, the world's largest steelmaker, unveiled a new $1 billion cost reduction plan and restarted dividend payments after higher than expected fourth-quarter earnings.

ArcelorMittal said on Thursday steel demand should grow in 2021 by between 4.5% and 5.5%, with its own shipments expected to increase, and also announced that chief financial officer Aditya Mittal was taking over as chief executive from his father Lakshmi.

The Luxembourg-based company said on Thursday fourth-quarter core profit (EBITDA), the figure most watched by the market, was $1.73 million, almost double the year-ago figure and far higher than the average forecast in a company poll of $1.47 million.

ArcelorMittal said it had benefited from a gradual recovery in steel demand resulting in higher steel shipments and improved margins as well as a better mining performance.

It also said it would start a new $1 billion fixed cost reduction program, to be achieved in full by 2022, including productivity gains and a 20% reduction in corporate office staff.

The company said it would restart paying dividends, with an initial $0.30 per share to be paid in June, and said it would return a further $570 million to shareholders through as new share buyback programme in 2021.