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ArcelorMittal SA Salient features

Steel News - Published on Fri, 08 Feb 2019

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On the back of a strong global pricing environment, the company's average realised prices rose by 12% on sales which were 5% higher than those of the previous year while cash costs per tonne increased by an average of just 2%. EBITDA improved to ZAR 3 608 million, from a loss of ZAR 315 million in 2017. Similarly, headline profits improved from a ZAR 2 518 million loss to a profit of ZAR 968 million. Net debt decreased by ZAR 2 787 million.
- Revenue increased by 16% to ZAR 45 274 million
- Liquid steel production of 5.1 million tonnes increased by 4%
- Sales volumes increased by 5% despite domestic apparent steel consumption being at a nine-year low
- Buoyant international market with exports up 21%
- Cash cost per tonne of liquid steel produced increased by 2%
- Turnaround in headline earnings from a loss of ZAR 2 518 million to a profit of ZAR 968 million
- Ebitda improved by ZAR 3 923 million from a loss of ZAR 315 million to a profit of ZAR 3 608 million
- Net borrowings decreased by ZAR 2 787 million to ZAR 475 million

ArcelorMittal SA’s share price jumped 15% to ZAR 3.95 on Thursday morning after it released its 2018 financial year results, showing a return to profit as forecast in a trading statement last week.

The SA operations of the world’s largest steelmaker reported a net profit of ZAR 1.3 billion for the year to end-December, a recovery from 2017’s R5.1bn loss. Revenue grew 16% to ZAR 45 billionn due to a 5% increase in the volume of steel sold.

Mr Kobus Verster CEO said in the results statement that the group managed to grow the overall volume of steel it sold thanks to demand from the rest of Africa offsetting a 4% drop in SA consumption.

Mr Verster was ArcelorMittal SA’s CFO until he left to head Aveng in 2011 and then returned as the steelmaker’s CEO in January 2018. He added that “SA and key African markets continue to face the threat of steel imports, mainly from China. Although there was a 20%, or 190,000 tons, decrease in imports, 769,000 tons of primary carbon steel were still imported into SA in the year, despite import duties, selective safeguarding and the designation of local steel.”

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Posted By : Ratan Singh on Fri, 08 Feb 2019
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