AMSA anticipates returning to profitability at the end of 2024
Revenue for the interim period of the six months ended 30 June 2024 lowered to R20.5 billion (2023: R21 billion) whilst loss from operations came to R542 million (2023: profit of R94 million). Total comprehensive loss for the period attributable to owners of the company worsened to R1.2 billion (2023 loss of R352 million).
Company outlook for the second half of 2024
Internationally, the World Steel Association expects a 1,7% increase in steel demand for 2024, with China continuing to play a directional role in international steel demand and pricing trends.
From a price perspective, the continued lower profitability of international steel exporters is likely to provide a floor to prices. An anticipated softening of interest rates internationally in the second half of this year, coupled with various trade remedies are likely to provide an improved environment for pricing sentiment, boding well for a gradual recovery in prices.
The provisional 9% safeguard duties on HRC and plate by the International Trade Administration Commission (“ITAC”) will provide some protection against the surge in imports.
Domestically, the potential for interest rate cuts as well as a focus on infrastructure-build by the Government of National Unity may bring much needed support to the demand dynamics in the local market. The Company expects to further advance it progress into the African market.
With the Longs Business continuing to operate, management is committed to working closely with all customers, suppliers and stakeholders to ensure the sustainability of Long steel products supply into the Southern African region.
Within the Flats Business, the focus will be on returning it to operational reliability while increasing its production and sales volumes for the benefit of the business’ customers.
The H2 2024 performance is expected to be more reflective of the underlying business performance, as the Company anticipates returning to profitability despite demand and price pressure. Exchange rates will continue to have an impact as will rail services and electricity reliability.
