DURBAN – South Africa's largest steel producer ArcelorMittal’s share price jumped more than 9 percent on the JSE after the group released a favourable trading update for the year to end December.
The group said it expected to reverse the 469-cent loss per share it reported last year to reflect an earnings per share of between 120c and 130c for the year, an improvement of between 126 percent and 128 percent change compared with last year.
“The profit per share includes a profit on the sale of ArcelorMittal South Africa's investment in Macsteel International Holdings,” the group said. ArcelorMittal strengthened its balance sheet after completing the sale of an indirect 50 percent interest in Netherlands-based Macsteel International Holdings for $220 million (R2.93 billion) to a subsidiary of Macsteel Holdings Luxembourg (MacHold) in November last year.
In October last year ArcelorMittal was boosted by the decision by US President Donald Trump when he announced that some local steel and aluminium producers have been exempted from 25 percent tariffs on steel and 10 percent tariffs on aluminium riled metals producers worldwide.
South Africa's Department of Trade and Industry said in October that the US Department of Commerce had granted exemptions for 161 aluminium and 36 steel products made by companies whose US customers asked for the exemptions, with ArcelorMittal being one of the companies that benefited from the decision.
The share price surged by 8 percent when the decision was announced and the latest trading update has again lifted the group's share price to R3.90 a share, up from Thursday's closing price of R3.23. The shares closed at R3.45 at the JSE close of Friday.
In the forthcoming results, the group expects to reverse the headline loss per share reported last year.
“The headline loss per share is expected to improve from 230c a share to a headline earnings per share within a range of 84c and 94c a share, improving by between 137and 141percent,” the group said. It expects to release the full year results on February 7.