Johannesburg, South Africa — 11 May 2012 – ArcelorMittal SA (Amsa) posted a R543 million turnaround quarter-on-quarter to report a R283 million profit for the three months ended March 2012 “’ a performance CEO Nkululeko Nyembezi-Heita described as ‘a huge relief’ and ‘highly satisfying’.
Miningmx reports that the improvement was on the back of industry restocking, the return to full production of the company’s Newcastle works, and a R245 million insurance payout from the disruptions at the Newcastle plant last year taking the total payout to R734 million.
“We are pleased with our first quarter results,” said Nyembezi-Heita. “Earnings are significantly better than last quarter and margins have improved. After two difficult quarters, it was a huge relief to regain operational stability,” she added in notes to the company’s announcement.
However, Nyembezi-Heita warned of difficult market conditions approaching. Coke and chemical sales fell owing to a shutdown of part of South Africa’s ferrochrome industry, a development related to Eskom power buy-backs.
In addition, steel demand remained lacklustre, especially in South Africa. “As yet, there are no tangible signs of a sustained recovery in underlying demand, with the all-important construction sector remaining fairly lackluster,” said Nyembezi-Heita.
“Similarly, the mining sector continues to register a slow-down in fixed asset investment and output levels. The manufacturing industry however, has proved resilient, with the automotive sector in particular experiencing stable conditions,” she added.
The company statement revealed that arbitration proceedings between Amsa and Sishen Iron Ore Company (SIOC) “’ a subsidiary of listed iron ore producer, Kumba Iron Ore “’ regarding the pricing of supply agreement between them had been postponed, pending the outcome of an appeal lodged by Imperial Crown Trading (ICT).
This was after a High Court judgement last year which concluded that the award of part of the prospecting rights from SIOC Property to ICT were found to be invalid. The appeal will be heard on 11 May, Amsa said.
Source: Miningmx. For more information, click here.