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Johannesburg - ArcelorMittal SA [JSE:ACL], the South African arm of the world's largest steel producer, on Wednesday reported first half diluted headline earnings per share of 449c - a turnaround from the 189c diluted headline loss per share reported in the first half of last year.
The company has declared an interim cash dividend of 150c.
This turnaround was achieved on the back of a marked improvement in market conditions post the financial crisis, both in terms of sales volumes and prices.
But the strengthening of the rand limited the improvement in the results.
Total steel sales for the first half 2010 were 2.7 million tonnes, 31% higher than the corresponding period last year and 12% higher than the preceding six months.
Revenue was up 35% to R16.2bn in the six months to end June 2010 from R12bn in the six months to end June 2009.
The profit for the period was R1.8bn or 443 cents, compared to an R848m or 190 cents loss in the same six months the year before.
Net realised prices were on average 8% higher than the preceding six months and remained at the same level as the corresponding period last year.
In US dollar terms however, prices were up 22% compared to the first six months last year due to the strengthening of the rand from an average rand/US dollar exchange rate of 9.22 to 7.54.
The cash cost of steel sales for the first half 2010 decreased by 15% compared to the corresponding period last year driven by lower costs of coking coal and alloys as well as higher volumes.
Compared to the preceding six months, the cash cost of steel sales decreased by 7%.
Last week ArcelorMittal South Africa announced an interim pricing agreement with Kumba Iron Ore [JSE:KIO] over iron ore it receives from Sishen.
The dispute with Kumba first arose in February when Kumba said it wanted more than the cost-plus-three percent it had been receiving for 6.25 million tonnes of iron ore supplied from Sishen.
During the interim period, ArcelorMittal South Africa imposed a surcharge on its domestic sales to compensate for the iron ore cost increase.
But in view of the interim agreement, ArcelorMittal South Africa said it would charge a single all-in price, reflecting the higher cost of iron ore, rather than a separate surcharge from August.
"This interim agreement has no bearing on the arbitration process currently underway or ArcelorMittal South Africa's conviction that the supply agreement remains legally valid and binding on the parties," ArcelorMittal said.
- I-Net Bridge
The company has declared an interim cash dividend of 150c.
This turnaround was achieved on the back of a marked improvement in market conditions post the financial crisis, both in terms of sales volumes and prices.
But the strengthening of the rand limited the improvement in the results.
Total steel sales for the first half 2010 were 2.7 million tonnes, 31% higher than the corresponding period last year and 12% higher than the preceding six months.
Revenue was up 35% to R16.2bn in the six months to end June 2010 from R12bn in the six months to end June 2009.
The profit for the period was R1.8bn or 443 cents, compared to an R848m or 190 cents loss in the same six months the year before.
Net realised prices were on average 8% higher than the preceding six months and remained at the same level as the corresponding period last year.
In US dollar terms however, prices were up 22% compared to the first six months last year due to the strengthening of the rand from an average rand/US dollar exchange rate of 9.22 to 7.54.
The cash cost of steel sales for the first half 2010 decreased by 15% compared to the corresponding period last year driven by lower costs of coking coal and alloys as well as higher volumes.
Compared to the preceding six months, the cash cost of steel sales decreased by 7%.
Last week ArcelorMittal South Africa announced an interim pricing agreement with Kumba Iron Ore [JSE:KIO] over iron ore it receives from Sishen.
The dispute with Kumba first arose in February when Kumba said it wanted more than the cost-plus-three percent it had been receiving for 6.25 million tonnes of iron ore supplied from Sishen.
During the interim period, ArcelorMittal South Africa imposed a surcharge on its domestic sales to compensate for the iron ore cost increase.
But in view of the interim agreement, ArcelorMittal South Africa said it would charge a single all-in price, reflecting the higher cost of iron ore, rather than a separate surcharge from August.
"This interim agreement has no bearing on the arbitration process currently underway or ArcelorMittal South Africa's conviction that the supply agreement remains legally valid and binding on the parties," ArcelorMittal said.
- I-Net Bridge
