ArcelorMittal SA Announced H1 Financial Results
ArcelorMittal South Africa’s operating profit decreased from a profit of ZAR 1224 million in June 2018, the first half-year profit in almost a decade, to a loss of ZAR 222 million. This was largely as a result of lower sales prices and volumes, higher electricity, rail and port tariffs, and sharp increases in primary raw material prices, notably iron ore. This resulted in a headline loss of ZAR 638 million compared to headline earnings of ZAR 54 million for the same period last year. Mr Kobus Verster, Chief Executive Officer of ArcelorMittal South Africa said that “After a positive 2018, the global steel industry is again facing extremely challenging market conditions in the current year as a result of weaker international steel prices, lower demand and significant increases in primary raw materials costs. In the first quarter of the year, the South African economy saw the largest contraction in a decade, mainly due to the decline in the mining and manufacturing sectors. Our results for the first half of the year reflect this challenging operating environment.”
H1 Result Highlights:
2% reduction in South Africa’s apparent steel consumption
4% decrease in liquid steel production with a 9% reduction in steel sales volumes
13% lower international steel prices
15% increase in the cost per tonne of liquid steel driven by sharp rises in the iron ore price and increases in electricity, rail and port tariffs
Business Transformation Programme - to improve international cost competitiveness - is gaining momentum
Aggressive focus on cash generation containing cash outflow to ZAR 1 266 million resulting in higher net debt of ZAR 1 741 million
EBITDA decreased by ZAR 1420 million to ZAR 167 million
Successfully completed the interim stave repair at the blast furnace at Vanderbijlpark
Works, and restarted the Vereeniging electric arc furnace
Improved health and safety record with LTIFR decreasing from 0.83 to 0.38
ZAR 4 500 million borrowing-based facility renewed
Acquiring of the Highveld Structural Mill
Source : Strategic Research Institute