An Arcelor electric
arc furnace in
operation
 
Johannesburg, South Africa — MININGREVIEW.COM — 12 February 2009 – ArcelorMittal South Africa – the South African unit of the world’s top steel maker – has reported a 65% jump in annual headline earnings for 2008, but forecast a substantial drop in profit during the first quarter of 2009.

In a statement issued here the company said domestic steel demand was expected to remain under pressure for at least the first half of 2009, and predicted earnings for first quarter would fall substantially compared to the fourth quarter of 2008.

Revenue for the period stood at R39.9 billion, up 36% on the previous year on the back of higher steel prices during the period. The company said it would pay a final dividend of 365 cents, compared to 196 cents a year ago.

Reuters reports that steel prices have collapsed as the global financial crisis shakes global economies, slashing end-user demand for steel, while tight credit markets delay construction projects. Steelmakers across the globe have been cutting production, delaying shipments and reviewing expansion and investment plans.

ArcelorMittal said last month it would leave prices for most of its products unchanged in February, after cuts of up to 40% since September. Only prices for two galvanised products were cut.