Africa's largest steel producer, ArcelorMittal South Africa, has announced its financial results for 2011, posting a net loss due to higher raw material costs, lower output and weaker sales.
In 2011, ArcelorMittal registered a net loss of ZAR 52 million ($6.9 million) compared to a profit of ZAR 1.4 billion in 2010. Its EBITDA was reduced by half to ZAR 1.7 billion ($223.82 million) compared to the previous year. Sales revenues were ZAR 31.4 billion ($4.13 billion), up four percent year on year thanks to a 12 percent increase in average net realized prices. Total steel shipments decreased by seven percent year on year.
According to ArcelorMittal South Africa, the main steel consuming sectors such as mining, construction and manufacturing have been negatively affected by the still weak South African economy with GDP growing at an annualized rate of about 2.6 percent in the third quarter of 2011, and at an estimated 2.9 percent in the fourth quarter.
For the first quarter of 2012, ArcelorMittal South Africa expects earnings to increase significantly due to improved production stability and higher sales volumes.