ArcelorMittal South Africa forecasts an improvement in interim earnings per share

ArcelorMittal South Africa says it has successfully delivered against its predicted outlook. File photo

ArcelorMittal South Africa says it has successfully delivered against its predicted outlook. File photo

Published Jul 21, 2022

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Steel-making group ArcelorMittal South Africa expects headline earnings a share to improve from R2.23 headline profit to within a range of R2.61 and R2.81 per share in the six months to June 30, but it’s preparing for tougher trading conditions.

This would represent an increase of between 17 and 26 percent compared with the same period in 2021, the group said in a trading statement yesterday.

Earnings per share were expected to improve from R2.02 profit per share in interim 2021 to within a range of R2.66 and R2.86, representing an increase of between 32-42 percent.

At the announcement of the 2021 full year results on February 10, the outlook for the coming six months was overall positive, though with demand returning to more normal levels and steel pricing being supported by raw material pricing trends. Central banks’ responses to rising inflation was flagged as a risk.

The group said it had successfully delivered against its predicted outlook, but challenges included the unavailability of the rail service; the impact on customers of flooding in KwaZulu-Natal; a two-week labour strike and unnecessary associated violence, intimidation, criminality and misconduct; and severe electricity load shedding, which was disruptive to suppliers and customers.

There had been a substantial increase in international steel prices in May, but prices started correcting from June.

Slowing economic growth and the heightened risk of a global recession presented challenges for the outlook of commodities and steel demand in the next 12 to 18 months. In China, the world’s largest steel-maker, plants were being idled to reduce inventories and address weak orders.

ArcelorMittal was intensifying its Value Plan Programme to prepare for the more difficult trading environment that lay ahead.

BUSINESS REPORT

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