[miningmx.com] – ARCELORMITTAL SA (Amsa) posted a R543m
turnaround quarter-on-quarter to report a R283m profit for the three months ended
March, a performance CEO Nkululeko Nyembezi-Heita described as “a huge relief” and
“highly satisfying”.
The improvement was on the back of industry restocking, the return to full production
of the company’s Newcastle works, and a R245m insurance payout from the
disruptions at the Newcastle plant last year taking the total payout to R734m.
“We are pleased with our first quarter results,” said Nyembezi-Heita. “Earnings are
significantly better than last quarter and margins have improved. After two difficult
quarters, it was a huge relief to regain operational stability,” she added in notes to
the company’s announcement today.
However, Nyembezi-Heita warned of difficult market conditions approaching. Coke
and chemical sales fell owing to a shutdown of part of South Africa’s ferrochrome
industry, a development related to Eskom power buy-backs.
In addition, steel demand remained lacklustre, especially in South Africa. “As yet,
there are no tangible signs of a sustained recovery in underlying demand, with the all-
important construction sector remaining fairly lackluster,” said Nyembezi-Heita.
“Similarly, the mining sector continues to register a slow-down in fixed asset
investment and output levels. The manufacturing industry however, has proved
resilient, with the automotive sector in particular experiencing stable conditions,” she
said.
Arbitration proceedings between Amsa and Sishen Iron Ore Company (SIOC), a
subsidiary of listed iron ore producer, Kumba Iron Ore, regarding pricing of supply
agreement between them had been postponed pending the outcome of an appeal
lodged by Imperial Crown Trading (ICT).
This was after a High Court judgement last year which found that the award of part of
the prospecting rights to SIOC property to ICT were found to be invalid. The appeal
will be heard on May 11, Amsa said.
