Jul 25, 2012
Mittal warns of more losses in Q3 on weak market conditionsBack
Africa|ArcelorMittal South Africa|CoAL|Africa|Newcastle Mill|Electricity Costs|Lower Steel Prices|Steel|Steel Demand|Steel Producer|Iron Ore|Iron-ore|Nonkululeko Nyembezi-Heita
© Reuse this
The group, led by Nonkululeko Nyembezi-Heita, revealed that domestic steel demand had been weaker than anticipated during the second quarter, when the group slumped to a headline loss of R177-million, and warned that the outlook for the third quarter was equally bleak.
“Due to a further deterioration in market conditions, third-quarter financial results are expected to extend the headline loss incurred in the second quarter on the back of lower steel prices and a further decline in domestic demand, partly offset by improved commercial coke sales,” the company said in a statement to shareholders.
Mittal reported improved operational stability during the period and “no major incidents”. But sales were lower, and higher domestic prices were not sufficient to offset higher input costs.
Revenue climbed 7% to R17.8-billion, on the higher prices for the period. However, the cash cost of producing hot-rolled coil increased by 11%, while the costs associated with producing billets rose 13%.
Underlying the cost increases was a 20% rise in the price of iron-ore, a 19% increase in electricity costs, a rise of 12% in local coking coal prices and a 2% increase for imported hard coking coal. The result was a 72% year-on-year fall in operating profit to R260-million.
Liquid steel production was 11% lower, at 349 000 t, on the comparable period in 2011, but 15% better than the previous six months, which had been afflicted by significant production losses primarily as a result of the dust catcher failure at the Newcastle mill.
"Mitigating the expected loss is a potential insurance pay-out resulting from claims currently in the process of finalisation. Movements in the exchange rate will also have an important impact," the company said.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Updated 6 hours ago The government of St Helena (SHG) and its Department for International Development (DFID) on Friday appointed airline Comair as the provider of air services to St Helena with the Island’s first airport opening in 2016. Comair would offer a weekly Saturday service,...
Updated 6 hours ago The Department of Communications (DoC) digital terrestrial television (DTT) project team was accelerating its efforts to “revive” South Africa’s long anticipated transition from analogue to digital broadcasting. After a more than six-year delay, the next few weeks...
Updated 6 hours ago Residential property prices are forecast to grow at 7.2% this year, on the back of 6.72% growth in 2014.
Recent Research Reports
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
This Week's Magazine
Projected capital expenditure (capex) in the South African automotive assembly industry should reach a record R7.48-billion this year, says the National Association of Automobile Manufacturers of South Africa (Naamsa) in its 2014 fourth quarter business review. Capex...
After several years of navigating project-threatening red tape and currency fluctuations, the 4.4 MW Bronkhorstspruit biogas power plant, which will supply clean energy to a leading automotive manufacturer in Gauteng, is expected to enter production before June....
South African paper and pulp producer Sappi reported earlier this month that it would build a pilot plant for the production of low-cost Cellulose NanoFibrils, or CNF (nanocellulose) at the Brightlands Chemelot Campus in Sittard-Geleen in the Netherlands.
The long-term outlook for Nigeria is a country that has the potential to be very strong. So affirmed International Monetary Fund (IMF) Nigeria Mission Chief and Senior Resident Representative Dr Gene Leon on recently. "But we are starting from a point of huge...
Poor infrastructure planning and inadequate maintenance are becoming increasingly problematic for new developments and the associated infrastructure required to support such developments. In many urban and rural municipalities, the state of infrastructure has been...