The stock exchanged hands at R3.77 a share at 10am after the group swung to an R1.3 billion net profit from an R5bn loss a year earlier, bolstered by higher international steel prices, lower costs and higher sales volumes.
The company said its exports increased 21percent while the average realised prices rose by 12percent on sales which were 5percent higher than those of the previous year.
Amsa chief executive Kobus Verster said the group's 2018 results were positively impacted by higher realised steel prices on the back of stronger international prices and higher sales volume despite the weakness of the South African economy.
Verster said that South Africa's subdued economic growth and poor investor confidence resulted in a 4percent decline in local steel consumption.
“Results were negatively affected by weaker demand in the domestic steel markets in which the group principally operates, constrained by low levels of investment and infrastructure spending and volatility in the rand/dollar exchange rate,” Verster said.
In 2017 Amsa reported that the loss for the year had increased by R422 million to R5.1bn, largely due to a higher impairment charge resulting from the declining economic environment and a strengthening in the rand against the US dollar.
Verster said South Africa and key African markets continued to face the threat of steel imports, particularly from China.
He said Amsa, however, remained bullish about Africa, adding that the steel markets on the continent remained positive due to the drive towards infrastructure investments especially in rail, roads and energy projects, notably in the west and east sub-Saharan regions.
Ian Cruickshanks, the chief economist at the South African Institute of Race Relations, said Amsa’s performance was a reflection of the steel industry over the past 10 years.
“It is an oversupplied market. Do you see the government's sector fixed investment?
"There is no fixed investment from the private sector either. We have little and declining demand for steel,” Cruickshanks said.
Amsa has previously been battered by low demand, cheap imports and the low economic environment and approached the government to implement tariffs as a buffer against the imports.
The company said the business transformation programme towards the end of 2017 had paid off.
It also restarted the electric arc furnace at Vereeniging Works last month to increase capacity.
Other highlights were the 16percent growth in revenue turnaround in headline earnings from a loss of R2518m to a profit of R968m and a decrease in net borrowings by R2 787m to R475m.
Cruickshanks said Amsa had to be given credit for cutting costs.
“They have cut costs to the bone; you have to give them credit for that," Cruickshanks added.
"However, there is no market. You have to have someone to sell the steel to. If you have no buyer, you have no business.
"Selling to Africa is good, but Amsa is competing with China in those markets,” he said.
Yesterday, ArcelorMittal shares closed 7.87percent higher at R3.70 on the JSE.