According to Reuters article published on February 9, 2023, ArcelorMittal South Africa's full-year profit declined by 62% due to weaker steel prices and demand at a time when costs were driven up by significant price increases of key inputs such as coal, the company said on Thursday.
The unit of Luxembourg-based ArcelorMittal (MT.LU), the world's No.2 steelmaker, said its headline earnings per share (HEPS) - the main profit measure in South Africa - fell to 2.34 rand ($0.13) per share in the year to December 2022, from 6.15 rand the previous year.
"Globally, steel prices declined at a faster rate than raw materials as particularly evident in the second half of the year," ArcelorMittal South Africa said.
On the other hand, it added, international prices of coking coal, a key ingredient in steelmaking, had gone up by 62% year-on-year in dollar terms.
Steel consumption declined by 12% to 4 million tonnes last year in South Africa, reflecting low market activity in key steel-consuming sectors, high market inventory levels the required destocking, project delays due to rising interest rates and overall weaker business confidence, the company said.
Therefore, the company added, it was adjusting production by idling plants, consolidating production at the most productive facilities and reducing fixed costs.
($1 = 17.7136 rand)
