ArcelorMittal South Africa winds down Longs Steel business
ArcelorMittal South Africa informed investors of the anticipated Q3 losses, driven by weak financial performance in the Longs Business. Key contributing factors included deteriorating global and local steel markets, unaffordable energy and logistics costs, and surging low-cost steel imports, particularly from China.
The Company highlighted ongoing engagement with Government since December 2023 to address structural issues affecting the Longs Business and emphasised the urgency of policy interventions to create a level playing field in the steel industry. Initial signs of recovery in international steel prices, following announced Chinese stimulus measures, were short-lived.
Despite implementing significant cost-cutting and cash management measures, the financial outlook for Q4 2024 remained extremely challenging, and consequently the expected financial performance for the 2024 financial year against that of 2023, will be substantially weaker.
ArcelorMittal South Africa has been working intensively on this issue for over a year. The Company is at a point where any further delay could affect the sustainability of the Company and therefore, a decision cannot be pushed back any further.
The Board and Management of ArcelorMittal South Africa have a fiduciary and legal duty to ensure that the overall business remains sustainable in the longer term.
- Based on information currently available, the Company expects:
Earnings per share to decline from a loss of R3.52 per share (comparable period) to a loss within a range of R5.48 and R6.21 loss per share for the period (representing a decrease of between 56% to 76%). - Headline earnings per share to decline from a R1.70 loss per share (comparable period) to a loss within a range of R4.06 and R4.41 loss per share for the period (representing a decrease of between 139% to 159%).
ArcelorMittal South Africa’s reviewed condensed consolidated financial statements for the year ended 31 December 2024 are expected to be released on SENS on Thursday, 6 February 2025, with a virtual presentation on the same day
