Johannesburg - ArcelorMittal South Africa, a unit of the world's top steelmaker, on Wednesday reported a full-year loss due to a drop in domestic steel sales and a decline in commercial coke sales.
Africa's biggest steelmaker said liquid steel production was down 7 percent while annual capacity dropped from 8.0 million tonnes to 6.5 million tonnes after deciding last year it was cheaper to shut three electric arc furnaces rather than complete a project to capture emissions.
File photo. Credit: Reuters
ArcelorMittal's South African operation reported a headline loss per share of 129 cents, compared with a headline loss per share of 13 cents in the previous year.
Headline earnings are the main profit gauge in South Africa and exclude certain one-off and non-trading items.
The fourth quarter loss was substantially higher than in the previous three months due to a seasonal drop in demand during December.
“We expect the loss making position to be reversed in the first quarter amid signs of improved domestic sales volumes as well as marginally higher prices,” said chief executive Nonkululeko Nyembezi-Heita.
Revenue was up 3 percent to 32.2 billion rand ($3.64 billion).
Shares in the company have been flat so far this year, compared with a 4 percent rise in the JSE Top-40 index.
The company is betting on projects to build renewable power plants, transport infrastructure and water systems to boost its earnings.
A major issue facing the South African unit is the outcome of a dispute over iron ore prices with Kumba Iron Ore, a unit of Anglo American.
The two firms have been at loggerheads over prices since early 2010 after a preferential deal lapsed. An arbitration hearing will decide if the steelmaker can keep sourcing iron ore from Kumba at a discount. - Reuters