ArcelorMittal SA reports 313% increase in H1 headlines earning
Wednesday, 28 July 2010
Shares in ArcelorMittal's South African unit gained more than 1% as the steel maker returns to first-half profit.
ArcelorMittal SA is trading 1.16% at R85.48, outpacing a slightly higher JSE Top-40 index of blue chips.
ArcelorMittal SA earlier posted headline earnings of R1 804 million for the first six months of 2010 compared to a loss of R844 million during the corresponding period last year.
It reported a profit of R404 million in the preceding six months.
"This turnaround was achieved on the back of a marked improvement in market conditions post the financial crisis, both in terms of sales volumes and prices," the company said.
The company said the strengthening of the rand over the first six months of 2009 had limited the improvement in the results.
The company’s total steel sales for the first half 2010 were 2.7 million tonnes, 31% higher than the corresponding period last year and 12% higher than the preceding six months.
Net realised prices were on average 8% higher than the preceding six months and remained at the same level as the corresponding period last year. In US dollar terms however, prices were up 22% compared to the first six months last year due to the strengthening of the rand from an average Rand/US Dollar exchange rate of 9.22 to 7.54.
The cash cost of steel sales for the first half 2010 decreased by 15% compared to the corresponding period last year driven by lower costs of coking coal and alloys as well as higher volumes. Compared to the preceding six months, the cash cost of steel sales decreased by 7%.
In line with the company’s policy, the board declared an interim cash dividend of 150 cents, covered approximately three times by headline earnings.
The company forecast a decline in third-quarter profit. "The earnings for the third quarter are expected to decline compared to the previous quarter due to lower international steel prices and demand together with input material costs that still remain at high levels," the company said in a statement.
