Feb 24 (Reuters) - RBC Capital downgraded Russel Metals RUS.TO to “sector perform” from “outperform” a day after the Canadian metals producer said it planned to cut 500 jobs and slash its dividend because of falling demand for steel products.
Shares of the company were trading down 10 percent at C$12.98 at midday on the Toronto Stock Exchange after hitting a four-year low of C$12.30.
“Management is focused on preserving capital for when recovery occurs -- suggesting that the dividend may not be safe, contrary to our prior belief,” the brokerage said.
The brokerage expects a writedown of company’s inventory of oil country tubular goods due to overstocking in the fourth quarter before demand fell.
Russel said on Monday it would cut its quarterly dividend by 44 percent to 25 Canadian cents and would reduce executive salaries by 10 percent. [ID:nN23350799] (Reporting by Richa Dubey in Bangalore; Editing by Mike Miller)