ArcelorMittal South Africa ‒ back in the black

Johannesburg, South Africa --- MININGREVIEW.COM --- 28 July 2010 - ArcelorMittal South Africa ‒ a unit of the world's biggest steelmaker ‒ has moved into a first-half profit helped by a recovery in steel demand, but the company is forecasting a decline in third-quarter profit.

In a statement issued here, the company said its headline earnings per share had totalled 450 cents in the six months to 30June, compared with a loss of 190 cents a year earlier.

“The earnings for the third quarter are expected to decline compared to the previous quarter due to lower international steel prices and demand, together with input material costs that remain at high levels,” the statement added.

It went on to say that revenue had risen by 33% to R16 billion, compared with R12 billion.

Steel demand has gradually picked up, but analysts have cautioned that high raw materials costs and an uncertain economic outlook may mean that steelmakers will be downbeat about the rest of the year.

ArcelorMittal South Africa last week reached a stop-gap agreement to buy ore from Kumba Iron Ore over the next year at about half of recent market prices, following a pricing disagreement that had dragged on since February.