ArcelorMittal South Africa is embarking on a large-scale restructuring process that may affect 2 000 full time positions, a decision taken as a result of the difficult domestic economic environment which the South African steel industry continues to face.
Specifying the difficult conditions, which the company says it has no control over include high electricity, rail, port, and primary raw material costs.
The action ArcelorMittal is taking is also a last resort measure, having already embarked on several initiatives to improve efficiencies and address expenditure that is within its control.
“However, these cost-saving initiatives will not be sufficient. More significant measures have become necessary, including the review of staffing levels, together with other interventions.”
The final out-come and number of positions affected is subject to a formal consultation process.
The company expects:
- headline earnings for the period to decrease by at least R650 million (headline earnings for 2018 was R54 million) to a headline loss, resulting in a decrease in headline earnings per share by at least 59 cents.
- loss for the period to improve by at least R700 million (44%), resulting in an improvement of the loss per share by at least 64 cents.