https://www.engineeringnews.co.za
Africa|Business|Financial|Services|Steel|Operations
Africa|Business|Financial|Services|Steel|Operations
africa|business|financial|services|steel|operations

AMSA warns of big 2019 loss, as it sheds more than 1 000 jobs

Wind-down of Saldanha Works (pictured) anticipated to be largely completed by the end of the first quarter

Wind-down of Saldanha Works (pictured) anticipated to be largely completed by the end of the first quarter

Photo by Creamer Media

23rd January 2020

By: Terence Creamer

Creamer Media Editor

     

Font size: - +

JSE-listed steel producer ArcelorMittal South Africa (AMSA) warned on Thursday that it would swing back into a large lossmaking position following an “exceptionally difficult” 2019 financial year, which the company described as the most challenging for the steel industry since the Global Financial Crisis of 2008.

In a note to shareholders, AMSA cautioned that its headline earnings for the year would plummet by at least R4.3-billion, representing a massive deterioration from the headline profit of R968-million reported in 2018; the group’s first profit since 2010.

Attributable profit for the period, meanwhile, would decrease by at least R6.1-billion, from R1.37-billion in 2018.

AMSA will release its 2019 financial results on February 6.

The group also provided an update on actions it had been taking in line with a strategic asset footprint review, launched in July last year in an effort to ensure the long-term sustainability of the company.

A large-scale employee reorganisation had been “largely finalised” and had resulted in a reduction of over 1 000 direct employees. “Additionally, a significant repricing and rescoping of subcontractor services will be completed by the end of the first quarter of 2020.”

Following the first phase of the asset review AMSA announced in November that it would be closing its Saldanha Steel Works in the Western Cape.

In a business update, the group told shareholders that the “orderly and commercial wind-down” of the flat-steel plant was progressing according to plan and was anticipated to be largely completed by the end of the first quarter.

Following the second phase of the asset review, which was initiated in November, AMSA had decided to refrain from closing significant long-steel capacity, however.

The second phase focused on its Newcastle Works, in KwaZulu-Natal, as well as certain of the long-steel rolling facilities in Pretoria and Vereeniging, in Gauteng.

AMSA had considered halting primary steelmaking operations at Newcastle, but it told shareholders that these would continue, with the intention of primarily serving the domestic and Africa overland markets.

“Significant organisational configuration opportunities have been identified to improve both operational effectiveness and controllable cost competitiveness of not only the long-steel product business, but that of the overall company. Development of this ‘One Organisation’ initiative has begun, with an envisaged implementation in 2020.”

AMSA said that, owing to challenging trading conditions, as well as the interventions it had made in response to the difficult market, abnormal and impairment charges had been recognised.

Edited by Creamer Media Reporter

Comments

Showroom

SABAT
SABAT

From batteries for boats and jet skis, to batteries for cars and quad bikes, SABAT Batteries has positioned itself as the lifestyle battery of...

VISIT SHOWROOM 
Immersive Technologies
Immersive Technologies

Immersive Technologies is the world's largest, proven and tested supplier of simulator training solutions to the global resources industry.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Photo of Martin Creamer
On-The-Air (15/03/2024)
15th March 2024 By: Martin Creamer

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.102 0.158s - 161pq - 2rq
Subscribe Now