ArcelorMittal South Africa Ltd. (ACL) reported an interim loss and expects earnings to be even lower in the third quarter due to flat demand and higher costs.
Net loss in the six months through June was 140 million rand ($14.2 million), or 35 cents a share, compared with profit of 102 million rand, or 25 cents a share, a year earlier, the Vanderbijlpark, Gauteng province-based unit of ArcelorMittal (MT) said in a statement. Revenue fell 11 percent to 15.9 billion rand.
Domestic sales will remain flat and an expected increase in steel prices will be offset by higher costs, including electricity tariffs in the South African winter and iron ore, ArcelorMittal said.
“Overall industrial production and construction activity remain relatively weak which will hamper steel demand,” the group said.
Steelmaking operations at the company’s plant in Vanderbijlpark came to a halt after a Feb. 9 blaze, with ArcelorMittal South Africa declaring force majeure and using existing stocks to mitigate the effect on customers.
Liquid steel production was 9 percent lower at 2.5 million tons due to the fire, the company said.
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