Africa's largest steel producer, ArcelorMittal South Africa, has announced its financial results for the fourth quarter and the full year 2012.
In the fourth quarter of 2012, ArcelorMittal South Africa registered a net loss of ZAR 462million ($51.5 million) compared to a net loss of ZAR 184 million in the corresponding quarter of 2011. The company posted a negative EBITDA of ZAR 158 million (17.6 million), compared to a positive EBITDA of ZAR 82 million in the corresponding quarter of the previous year. The company's sales revenue in the fourth quarter amounted to ZAR 6.88 billion ($667 million), decreasing by 5.2 percent year on year.
In the full year, ArcelorMittal South Africa reported a net loss of ZAR 508 million ($56.7 million), compared to a net profit of ZAR 8 million in 2011. The company's EBITDA for the period in question amounted to ZAR 1.2 billion ($133.8 million), down 35 percent year on year, due to a modest drop in domestic steel dispatches and a substantial decline in commercial coke sales. The sales revenue increased by 2.66 percent year on year to ZAR 32.3 billion ($3.6 billion).
Meanwhile, 2012 steel shipments were down two percent, with flat product shipments dropping eight percent, while long product shipments were up 16 percent, due to a strong recovery after the major production outage in 2011, all on year-on-year basis. ArcelorMittal South Africa's local shipments decreased by five percent offset by seven percent higher exports, both compared to 2011. In 2012, liquid steel production of the company declined by seven percent, with capacity utilization at 66 percent, which was marginally lower than the 68 percent achieved the previous year.
According to ArcelorMittal South Africa, in 2012 domestic steel demand continued to be weak, driven by sluggish demand from the building and construction sector, the largest steel consumer. The company expects a turnaround from the loss-making position in the previous quarter to a breakeven in the first quarter of 2013.