Africa's largest steel producer, ArcelorMittal South Africa, has announced its financial results for the first quarter of the current year, reporting a net loss of ZAR 275 million ($30.2 million) compared to a net profit of ZAR 279 million in the corresponding quarter of 2012.
In the first quarter this year, the company's EBITDA amounted to ZAR 169 million (18.6 million), down from ZAR 817 million in the corresponding quarter of the previous year. ArcelorMittal South Africa's sales revenue in the first quarter decreased by 15.05 percent year on year to ZAR 7.76 billion ($852.77 million), amid a 16 percent drop in total steel shipments, with a 12 percent fall in domestic shipments and a 28 percent decline in exports.
According to ArcelorMittal South Africa, primarily as a result of the Vanderbijlpark fire which occurred in February, its overall liquid steel production was 355,000 mt or 26 percent lower, leading to the capacity utilization for flat steel dropping to 54 percent from 69 percent in the first quarter of 2012. The equivalent figures for long steel were 81 percent and 70 percent respectively. The company estimates that 361,000 mt of liquid steel production was lost as a result of the incident.
The company had to declare force majeure following the fire which caused severe damage to the steelmaking facility. Steel produced at Saldanha was diverted to the domestic market and semi-finished products were also imported from sister companies within the ArcelorMittal Group.
ArcelorMittal South Africa expects a turnaround from the net loss realized in the first quarter to positive earnings in the second quarter underpinned by stable market demand, recovery of production back to normal levels and higher sales volumes. International steel prices are expected to remain soft.