Johannesburg, South Africa — MININGREVIEW.COM —29 May 2009 – A drop of about 70% in Highveld Steel and Vanadium’s headline earnings and operating profit for the quarter ended 31 March 2009 has forced the company to continue with its production cutbacks.
F24.com – quoting Miningmx.com – says Highveld reported headline earnings of R130 million for the quarter to end-March, and operating profit of R178 million – decreases of 72% and 74% respectively from the previous corresponding period.
The company attributed these results to what it called depressed markets and very low orders for steel products. According to the firm, its production of cast blocks decreased by 18.3%, sections by 75.2%, plates by 31.9% and coils by 60.6%, compared to the previous quarter to end-December.
“Vanadium slag sales volumes continued to decrease as a result of the continually weakening demand for vanadium,” said company CEO Walter Ballandino. Vanadium is a mineral used to harden steel.
“To ensure the sustainability of its operations, the company has intensified the current strategy of implementing further cost cutting,” he added. In October 2008 the company initiated talks with labour unions to embark on a restructuring programme. “It is expected that this retrenchment process will be completed within three months,” Ballandino said.
Highveld’s cash decreased by almost a third – dropping from R1.6 billion in the first quarter of 2008 to R1.1billion.