R1.1 billion loss but AMSA adamant ‘tide’ is turning
ArcelorMittal South Africa's financial results for the first six months of 2024 is indicative of the potential for gradual recovery in the second half of 2024 and a return to profitability.
Commenting on the results, Kobus Verster, chief executive officer, said while a headline loss of R1.1 billion was reported this has improved from the R1.443 billion loss in the second half of 2023.
Additionally, it was highlighted that the results were impacted by difficult trading conditions and operational interruptions at the Vanderbijlpark blast furnaces.Verster said the results showcase the steel giant’s resilience in the face of challenging market conditions and operational issues.
“The Longs Business (a valued part of AMSA’s Newcastle works) continues operations, preserving 3,500 direct jobs and 80,000 jobs across the value chain,” Verster told the Advertiser.
“Our fixed costs reduced by R132 million to R3, 417 million despite inflationary pressures.”
The results were impacted by difficult trading conditions and operational interruptions at the Vanderbijlpark blast furnaces.
However, the company’s focus on cash management has yielded benefits, maintaining net borrowings at R3,793 million – a controlled increase from R3,215 million at the end of 2023.
Despite challenges, including chilled hearth conditions at the Vanderbijlpark blast furnaces in April and May, the company demonstrated operational agility.
Verster said the decision to continue operations of the Long Steel Products business – vital to Newcastle’s economy – underscores the company’s commitment to the Southern African steel industry.
“We are focusing on projects that will drive future earnings, growth, cost savings and decarbonisation efforts. The company is actively supporting localization initiatives in energy, logistics, infrastructure, and automotive sectors, positioning itself for growth opportunities arising from national development programmes and the Africa Continental Free Trade Agreement.”
Turning to environmental and social responsibility issues, Verster said AMSA has made significant strides in environmental management, achieving 100% ISO 14001 certification for all operations.
Notable improvements include significant progress in reducing emissions. Particulate emissions reduced by 34%, with Vanderbijlpark having achieved a 67% reduction since 2008.
The company has refurbished and further extended its Zero Effluent Discharge Treatment Plants and is advancing its Decarbonisation Roadmap.
“We are continuing to invest in community development, particularly in education and skills training, impacting over 27,000 learners and creating job opportunities for the unemployed. While challenges persist, we are confident in our ability to capitalise on emerging opportunities and drive sustainable growth for the benefit of all our stakeholders.”
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