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ARCELORMITTAL SOUTH AFRICA LIMITED - Reviewed group financial results for the year ended 31 December 2012

Release Date: 06/02/2013 08:00
Code(s): ACL     PDF:  
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Reviewed group financial results for the year ended 31 December 2012

ArcelorMittal South Africa Limited 
(ArcelorMittal South Africa, the company or the group)
Registration number: 1989/002164/06  
Share code: ACL  
ISIN: ZAE 000134961
Reviewed group financial results for the year ended 31 December 2012														

Condensed group statement of comprehensive income                                                                                                                             
          Quarter ended (unaudited)                                                                                Year ended                    
                                                                                                            31 December     31 December    
  31 December    30 September    31 December                                                                       2012            2011   
         2012            2012           2011            In millions of rands                                   Reviewed         Audited   
        6 885           7 614          7 258            Revenue                                                  32 291          31 453   
       (3 754)         (4 731)        (5 672)           Raw materials and consumables used                      (18 760)        (19 886)  
         (814)           (820)          (758)           Employee costs                                           (3 356)         (3 164)  
         (684)           (932)          (653)           Energy                                                   (3 156)         (3 177)  
                                                        Movement in inventories of finished                          
         (335)            365            932              goods and work in progress                               (467)          1 733                                         
         (420)           (389)          (363)           Depreciation                                             (1 582)         (1 409)  
           (5)             (4)            (4)           Amortisation of intangible assets                           (16)            (14)  
       (1 456)         (1 258)        (1 025)           Other operating expenses                                 (5 431)         (5 239)  
         (583)           (155)          (285)           (Loss)/profit from operations                              (477)            297   
                                                        Finance and investment income                               
          108               4              5             (Note 4)                                                    60              31                   
          (83)           (108)          (106)           Finance costs (Note 5)                                     (334)           (168)  
                                                        Income/(loss) from equity accounted                            
          (53)             61            120              investments (net of tax)                                   59             (34)                 
         (611)           (198)          (266)           (Loss)/profit before tax                                   (692)            126   
          149              50             82            Income tax credit/(expense) (Note 6)                        184            (118)  
         (462)           (148)          (184)           (Loss)/profit for the period                               (508)              8   
                                                        Other comprehensive income                                                        
                                                        Exchange differences on translation of                          
           50             (16)            14              foreign operations                                         61             315                
                                                        Losses on available-for-sale                                  
                           (9)           (10)             investment taken to equity                                (33)            (12)                 
                                                        Share of other comprehensive income                             
           44              (6)                            of equity accounted investments                            36               7                
                                                        Total comprehensive (loss)/income                             
         (368)           (179)          (180)             for the period                                           (444)            318                  
                                                        (Loss)/profit attributable to:                                                    
         (462)           (148)          (184)           Owners of the company                                      (508)              8   
                                                        Total comprehensive (loss)/income                                                 
                                                          attributable to:                                                            
         (368)           (179)          (180)           Owners of the company                                      (444)            318   
                                                        Attributable (loss)/earnings                                                      
                                                          per share (cents)                                                           
         (115)            (37)           (46)           - basic                                                    (127)              2   
         (115)            (37)           (46)           - diluted                                                  (127)              2   


Condensed group statement of financial position                                                     
                                                           As at           As at          As at   
                                                     31 December    30 September    31 December   
                                                            2012            2012           2011   
  In millions of rands                                  Reviewed       Unaudited        Audited   
  Assets                                                                                          
  Non-current assets                                      19 419          19 323         19 573   
  Property, plant and equipment                           16 068          16 017         16 618   
  Intangible assets                                          121             117            126   
  Equity accounted investments                             3 204           3 165          2 772   
  Other financial assets                                      26              24             57   
  Current assets                                          11 479          12 629         12 849   
  Inventories                                              8 761           9 038          9 935   
  Trade and other receivables                              1 669           3 282          2 374   
  Taxation                                                   154              11            100   
  Other financial assets                                      11              14              1   
  Cash and cash equivalents                                  884             284            439   
  Total assets                                            30 898          31 952         32 422   
  Equity and liabilities                                                                          
  Shareholders equity                                    22 242          22 605         22 669   
  Stated capital                                              37              37             37   
  Non-distributable reserves                              (2 178)         (2 137)        (2 231)  
  Retained income                                         24 383          24 705         24 863   
  Non-current liabilities                                  4 091           4 450          4 474   
  Borrowings and other payables (Note 7)                     270             259            241   
  Finance lease obligations                                  426             464            451   
  Deferred income tax liability                            2 031           2 166          2 310   
  Provision for post-retirement medical costs                  9               7              7   
  Non-current provisions                                   1 355           1 554          1 465   
  Current liabilities                                      4 565           4 897          5 279   
  Trade and other payables                                 3 922           4 186          4 644   
  Borrowings and other payables                              157             155            107   
  Finance lease obligations                                   77              53             57   
  Taxation                                                    97                                  
  Current provisions                                         312             280            471   
  Bank overdraft                                                             223                                                                                                                
  Total equity and liabilities                            30 898          31 952         32 422   

Condensed group statement of changes in equity                                                                     
                                                                        Treasury         
                                                                           share                  
                                                              Stated      equity       Other    Retained                                     
  In millions of rands                                       capital     reserve    reserves    earnings     Total                           
  Nine months ended 30 September 2011 (unaudited)                                                                    
  Balance as at 1 January 2011                                    37      (3 918)      1 443      24 994    22 556   
  Total comprehensive income/(loss)                                                      306         192       498   
  Management share trust: net of treasury share purchases                                 (7)                   (7)  
  Share-based payment reserve                                                             16                    16   
  Transfer of equity accounted earnings                                                 (162)        162             
  Dividend paid                                                                                     (221)     (221)  
  Balance as at 30 September 2011 (unaudited)                     37      (3 918)      1 596      25 127    22 842   
  Quarter ended 31 December 2011 (unaudited)                                                                         
  Balance as at 30 September 2011                                 37      (3 918)      1 596      25 127    22 842   
  Total comprehensive income/(loss)                                                        4        (184)     (180)  
  Management share trust: net of treasury share purchases                                 (5)                   (5)  
  Share-based payment reserve                                                             12                    12   
  Transfer of equity accounted earnings                                                   80         (80)            
  Balance as at 31 December 2011 (audited)                        37      (3 918)      1 687      24 863    22 669   
  Six months ended 30 June 2012 (reviewed)                                                                           
  Balance as at 31 December 2011                                  37      (3 918)      1 687      24 863    22 669   
  Total comprehensive income/(loss)                                                        1         102       103   
  Management share trust: net of treasury share purchases                                                            
  Share-based payment reserve                                                             10                    10   
  Transfer of equity accounted earnings                                                   51         (51)            
  Balance as at 30 June 2012 (reviewed)                           37      (3 918)      1 749      24 914    22 782   
  Quarter ended 30 September 2012 (unaudited)                                                                        
  Balance as at 30 June 2012 (reviewed)                           37      (3 918)      1 749      24 914    22 782   
  Total comprehensive income/(loss)                                                      (31)       (148)     (179)  
  Management share trust: net of treasury share purchases                                                            
  Share-based payment reserve                                                              2                     2   
  Transfer of equity accounted earnings                                                   61         (61)            
  Dividend paid                                                                                                      
  Balance as at 30 September 2012 (unaudited)                     37      (3 918)      1 781      24 705    22 605   
  Quarter ended 31 December 2012 (unaudited)                                                                         
  Balance as at 30 September 2012                                 37      (3 918)      1 781      24 705    22 605   
  Total comprehensive income/(loss)                                                       94        (462)     (368)  
  Management share trust: net of treasury share purchases                                  5                     5   
  Share-based payment reserve                                                                                        
  Transfer of equity accounted earnings                                                 (140)        140             
  Balance as at 31 December 2012 (reviewed)                       37      (3 918)      1 740      24 383    22 242   

Condensed group statement of cash flows                                                                                                                              
          Quarter ended (unaudited)                                                                                  Year ended                    
                                                                                                             31 December     31 December    
  31 December    30 September    31 December                                                                        2012            2011   
         2012            2012           2011            In millions of rands                                    Reviewed         Audited     
                                                        Cash in/(out) flows from operating                           
        1 313            (146)           (61)             activities                                               1 794          (1 412)                    
                                                        Cash generated from/(utilised in)                            
        1 379             (97)            73              operations                                               2 040            (879)                    
            1               3              4            Interest income                                               10              29   
          (44)            (36)           (42)           Finance costs                                               (170)           (103)  
                                                        Dividend paid                                                               (221)  
          (32)                           (81)           Income tax paid                                              (52)           (243)  
            9             (16)           (15)           Realised foreign exchange movement                           (34)              5   
                                                        Cash outflows from investing                                
         (432)           (284)          (513)             activities                                              (1 146)         (1 212)                     
         (419)           (194)          (450)           Investment to maintain operations                           (809)           (924)  
          (14)            (21)           (75)           Investment to expand operations                              (66)           (266)  
                                                        Shares acquired in associate and equity                       
          (88)            (71)          (144)             accounted investment                                      (366)           (180)                   
            1               1            106            Proceeds on disposal of assets                                 5             106   
            1               1                           Investment income - interest                                   3               2   
                                                        Dividend from equity accounted                                   
           87                             50              investments                                                 87              50                 
                                                        Cash outflows from financing                                  
          (58)            (77)          (267)             activities                                                (228)           (616)                   
                                                        Repayment of borrowings, finance                              
          (58)            (77)          (267)             lease obligations and other payables                      (228)           (616)                     
                                                        Increase/(decrease) in cash and                                
          823            (507)          (841)             cash equivalents                                           420          (3 240)                   
                                                        Effect of foreign exchange rate                                  
                           18              4              changes                                                     25             173                  
                                                        Cash and cash equivalents at                                    
           61             550          1 276              beginning of period                                        439           3 506                  
                                                        Cash and cash equivalents at end                               
          884              61            439              of period                                                  884             439                   

Segment information                                                                                                                               
             Quarter ended (unaudited)                                                                                   Year ended                    
                                                                                                                31 December    31 December    
   31 December     30 September     31 December                                                                        2012           2011   
          2012             2012            2011            In millions of rands                                    Reviewed        Audited  
                                                           Flat Steel Products                                         
         4 708            4 996           5 549            Revenue (R million)                                       20 991         21 793   
         4 456            4 732           5 284            - External                                                20 192         21 092   
           252              264             265            - Internal                                                   799            701   
          (306)              11            (152)           EBITDA (R million)                                          (266)           597   
          (346)             316            (292)           Depreciation and amortisation (R million)                 (1 294)        (1 133)  
          (652)            (305)           (444)           (Loss)/profit from operations (R million)                 (1 560)          (536)  
        19 713           21 050          21 322            Assets                                                    19 713         21 322   
                                                           Unaudited information                                                             
           720              958             989            Liquid steel production (000 tonnes)                      3 554          4 060   
           702              733             806            Steel sales (000 tonnes)                                  3 138          3 424   
           475              550             554            - Local                                                    2 223          2 468   
           227              183             252            - Export                                                     915            956   
            61               67              70            Capacity utilisation (%)                                      65             71   
                                                           Long Steel Products                                         
         2 343            2 742           2 216            Revenue (R million)                                       11 474          9 514   
         1 968            2 459           1 384            - External                                                10 289          8 044   
           375              283             832            - Internal                                                 1 185          1 470   
            (8)              54              74            EBITDA (R million)                                           770            500   
           (79)              75             (67)           Depreciation and amortisation (R million)                   (299)          (269)  
           (87)             (21)              7            (Loss)/profit from operations (R million)                    471            231   
         6 142            6 202           6 965            Assets                                                     6 142          6 965   
                                                           Unaudited information                                                             
           323              362             209            Liquid steel production (000 tonnes)                      1 536          1 393   
           286              364             187            Steel sales (000 tonnes)                                  1 484          1 284   
           221              252             171            - Local                                                    1 113          1 039   
            65              112              16            - Export                                                     371            245   
            56               63              36            Capacity utilisation (%)                                      67             61   
                                                           Coke and Chemicals                                         
           479              429             604            Revenue (R million)                                        1 856          2 378   
           461              423             590            - External                                                 1 810          2 317   
            18                6              14            - Internal                                                    46             61   
           143              110             225            EBITDA (R million)                                           503            870   
            (4)              (9)            (15)           Depreciation and amortisation (R million)                    (32)           (52)  
           139              101             210            Profit from operations (R million)                           471            818   
         1 003            1 003           1 082            Assets                                                     1 003          1 082   
                                                           Unaudited information                                                             
           125               54             154            Commercial coke produced (000 tonnes)                       446            633   
           117              110             163            Commercial coke sales (000 tonnes)                          460            631   
            29               25              30            Tar sales                                                    109            117   
                                                           Corporate and other                                         
            13               63             (65)           EBITDA (R million)                                           114           (247)  
                                                           Depreciation and amortisation credit                             
             4               (7)              7             (R million)                                                  27             31                
            17               70             (58)           Profit/(loss) from operations (R million)                    141           (216)  
         4 040            3 693           3 053            Assets                                                     4 040          3 053   

Salient features                                                                                                                                 
             Quarter ended (unaudited)                                                                                   Year ended                    
                                                                                                                31 December    31 December    
  31 December    30 September    31 December                                                                           2012           2011   
         2012            2012           2011            In millions of rands                                       Reviewed        Audited 
                                                        Reconciliation of earnings before                                                     
                                                          interest, taxation, depreciation                                                
                                                          and amortisation (EBITDA)                                                       
         (583)           (155)          (285)           (Loss)/profit from operations                                  (477)            297   
                                                        Adjusted for:                                                                         
          420             389            363            - Depreciation                                                1 582           1 409   
            5               4              4            - Amortisation of intangible assets                              16              14   
         (158)            238             82            EBITDA for the period                                         1 121           1 720   
                                                        Reconciliation of headline                                                            
                                                          (loss)/earnings                                                                 
         (462)           (148)          (184)           (Loss)/profit for the period                                   (508)              8   
                                                        Adjusted for:                                                                         
                                                        - (Profit)/loss on disposal or scrapping                        
            9             (18)          (104)               of assets                                                    (4)            (82)                           
           (3)             (2)            28            - Tax effect                                                     (6)             22   
                                                        Headline (loss)/earnings for                                   
         (456)           (168)          (260)             the period                                                   (518)            (52)                     
                                                        Headline (loss)/earnings per                                                          
                                                          share (cents)                                                                   
         (114)            (42)           (65)           - basic                                                        (129)            (13)  
         (114)            (42)           (65)           - diluted                                                      (129)            (13)  
                                                        Return on ordinary shareholders                                                      
                                                          equity per annum                                                                
         (8.2)           (2.6)          (3.2)           - Attributable earnings (%)                                    (2.3)            0.0   
         (8.1)           (3.0)          (4.6)           - Headline earnings (%)                                        (2.3)           (0.2)  
          2.1            (0.6)           0.4            - Net cash to equity (%)                                        2.1             0.4   
                                                        Share Statistics                                                                      
                                                        Ordinary shares (000)                                                                
      401 202         401 202        401 202            - in issue                                                  401 202         401 202   
      401 202         401 202        401 202            - weighted average number of shares                         401 202         401 202   
      401 202         401 202        401 271            -   diluted weighted average number                         401 202         401 444   
                                                         of shares                                                                            
        36.00           41.00          68.58            Share price (closing) (rand)                                  36.00           68.58   
       14 443          16 449         27 514            Market capitalisation (R million)                            14 443          27 514   
        55.44            56.3           56.5            Net asset value per share (rand)                              55.44           56.50   
                                                        Dividend per share (cents)                                                            
                                                        - interim                                                                        55

Overview
The global steel industry continued to struggle during 2012 as slow global economic growth put pressure on steel
demand across all regions. Overall business confidence levels and manufacturing activities continued to be strained by
prolonged uncertainty from the European debt crisis coupled with a sharper-than-expected slowdown in the Chinese economy, the
worlds largest steel producer and consumer. This has resulted in a softening in global steel demand and a decline in
steel prices. Despite production cutbacks by a number of steel producers, the industry globally remains in an oversupply
position. The situation has been somewhat positive for Africa, especially within the sub-Saharan region, as a result of
infrastructure-related projects and increased mining activities.

The impact of the global economic slowdown took its toll on the South African economy, driven by poor demand in the
euro zone and domestic challenges relating to strikes and reduced infrastructure development expenditure negatively
affecting GDP trends in key steel consuming sectors, primarily building and construction, manufacturing and mining. The
building and construction sector, which accounts for the largest share of steel consumption, remains weak with building
completions and plans in the pipeline being sluggish. The increased flow of finished steel product imports remains a challenge
for domestic downstream producers. The poor underlying demand together with destocking activities resulted in a decline
in domestic sales partially offset by higher net realised prices, mainly due to a weaker exchange rate. Prices of key
raw materials such as coking coal, pellets and scrap softened while electricity tariffs again increased sharply. There
was a steep decline in commercial coke sales caused by the shutdown of smelters by ferrochrome producers participating in
the Eskom electricity buyback scheme. 

ArcelorMittal South Africa posted a headline loss of R518 million for the year ended 31 December 2012 compared to the
headline loss of R52 million in the previous financial year while EBITDA decreased by 35% year-on-year to R1.1 billion.

Liquid steel production was down 7% with capacity utilisation at 66%, which was marginally lower than the 68% achieved
in the prior year. Environmental compliance combined with high electricity tariff increases led to the closure of the
electric arc furnaces ("EAFs") in Vanderbijlpark during October. This effectively reduces the companys liquid steel capacity 
from 8.0 to 6.5 million tonnes per annum.

We are pleased to report an all-time record safety performance, with zero fatalities and a lost time injury frequency
rate per million man-hours worked of 0.61 against 1.24 recorded in the previous year, which is getting close to the world 
benchmark. The safety of our employees and our contractors is our first priority and we consider this to be fundamental to 
sustainability. 

Key statistics                                                                                                                             
           Quarter ended (unaudited)                                                                                 Year ended                   
                                                                                                             31 December    31 December   
  31 December    30 September    31 December                                                                        2012           2011   
         2012            2012           2011                                                                    Reviewed        Audited   
        6 885           7 614          7 258            Revenue (R million)                                       32 291         31 453   
         (158)            238             82            EBITDA (R million)                                         1 121          1 720   
         (160)            217             83            EBITDA/tonne (R/tonne)                                       243            365   
         (2.3)            3.1            1.1            EBITDA margin (%)                                            3.5            5.5   
         (583)           (155)          (285)           (Loss)/profit from operations (R million)                   (477)           297   
         (462)           (148)          (184)           Net (loss)/profit (R million)                               (508)             8   
         (456)           (168)          (260)           Headline loss (R million)                                   (518)           (52)  
         (114)            (42)           (65)           Headline loss per share (cents)                             (129)           (13)  
        1 043           1 320          1 198            Liquid steel production (000 tonnes)                      5 090          5 453   
          988           1 097            993            Steel sales (000 tonnes)                                  4 622          4 708   
          696             802            725            - Local                                                    3 336          3 507   
          292             295            268            - Export                                                   1 286          1 201   
         0.50            0.52           0.88            Lost time injury frequency rate                             0.61           1.24   

Financial review
Full year ended 31 December 2012 compared to full year ended 31 December 2011
Revenue of R32.3 billion was 3% higher than reported a year ago. Total steel shipments decreased by 2%, with domestic
shipments down 5% partly offset by 7% higher exports. Flat steel shipments declined by 8% while long steel products rose 16%
due to a strong recovery after the major production outage in 2011. Average net realised prices rose 7% with domestic and
export prices increasing by 7% and 9% respectively. Prices for flat steel were up 5% and long steel 10%. Revenue from
the Coke and Chemicals business of R1.9 billion was 23% lower following a 27% fall in commercial coke sales volumes and a
3% drop in net realised prices.

Cash costs of hot rolled coil increased by 5% and those of billets by 11%. Thabazimbi iron ore rose 19% while Sishen
iron ore remained flat on a US Dollar basis but increased by 10% in rand terms. Electricity prices were 16% higher while
the price of imported coking coal decreased by 15% on a US Dollar FOB basis and by 4% in rand terms. Scrap prices
dropped marginally. Liquid steel production was 363 000 tonnes lower or 7%. Capacity utilisation for flat steel was 65% (EAFs
included 62%) compared to 71% last year and for long steel 67% compared to 61%. Operating profit fell by R774 million to
a loss of R477 million.

Financing costs of R334 million for the year are R166 million more than the corresponding period due to higher
interest paid of R71 million on bank overdrafts and net foreign exchange losses of R9 million compared to a gain of R124
million in 2011. 

Our share of the profit from equity accounted investments after taxation of R59 million compares with a loss of R34
million a year earlier. The profit relates to higher income from Macsteel International Holdings BV and a decline in the
loss from Coal of Africa Limited.

Quarter ended 31 December 2012 compared with quarter ended 31 December 2011 (unaudited)
Revenue decreased by 5% to R6.9 billion for the quarter. Total steel shipments were down marginally on the back of a
4% drop in domestic shipments while exports were up 9%. Flat steel shipments declined by 13% while long steel products
rose by 53% following a strong recovery from the structural failure affecting the 2011 corresponding period. Average net
realised prices decreased by 3% with domestic and export prices decreasing by 1% and 5% respectively. Prices for flat
steel dropped 3% and long steel 6%. Revenue from the Coke and Chemicals business of R479 million was 21% lower following a
28% decrease in commercial coke sales volumes and 4% drop in net realised prices.

Cash costs of hot rolled coil increased by 6% and those of billets by 7%. Sishen iron ore prices remained flat on a US
Dollar basis but increased by 10% in rand terms. Electricity and natural gas prices climbed by 18% and 17% respectively
while import coal and pellets decreased by 34% and 38% on a US Dollar FOB basis and 29% and 33% in rand terms
respectively. Scrap prices decreased by 2%. Liquid steel production was 154 000 tonnes lower or 13%. Capacity utilisation for
flat steel was 61% (EAFs included 51%) compared to 70% in the prior year and 56% for long steel compared to 36%. Operating
profit declined by R298 million to a loss of R583 million.

Financing cost of R83 million for the quarter is R23 million lower than the corresponding period due to a decrease in
the discount rate used to determine the present value of long-term liabilities such as environmental obligations and
onerous contract provisions in the corresponding period.

Our share of the loss from equity accounted investments after taxation of R53 million compares with a profit of R120
million a year ago mainly due to a higher loss from Coal of Africa Limited.

Quarter ended 31 December 2012 compared with quarter ended 30 September 2012 (unaudited)
Revenue decreased by 10% to R6.9 billion for the quarter on the back of a 10% drop in steel shipments. Domestic
shipments were down 13% following the seasonal slowdown in December while exports were flat. Flat steel shipments declined by
4% and long steel by 21% while average net realised prices were marginally lower. Prices for flat steel were down 2%,
while long steel rose slightly. Revenue from the Coke and Chemicals business of R479 million was 12% higher due to a 7%
rise in commercial coke sales volumes and a marginal increase in net realised prices.

Cash costs of hot rolled coil increased by 7% with billets increasing by 2%. The price of imported coking coal
decreased by 8% on a US Dollar FOB basis and 3% on a rand basis. Thabazimbi iron ore was up 11% while Sishen iron ore remained
flat on a US Dollar basis but climbed 6% in rand terms. Local coking coal and scrap increased by 19% and 6%
respectively. Electricity fell 25% following the high prices that prevailed during the winter months. Liquid steel production was
277 000 tonnes lower or 21% as a result of the interim repair of blast furnace C in Vanderbijlpark and the taphole repair
of blast furnace N5 in Newcastle. Capacity utilisation for flat steel was 61% (51% with EAFs included) compared to 67% in
the previous quarter and 56% for long steel compared to 63%. Operating profit declined by R428 million to a loss of
R583 million.

Financing costs of R83 million for the quarter are R25 million lower than third quarter due to a change in the
discount rate used to determine the present value of long-term liabilities, such as environmental obligations and onerous
contract provisions.

Our share of the loss from equity accounted investments after taxation of R53 million compares with a profit of R61
million. The loss relates to a higher loss from Coal of Africa Limited and lower income from Macsteel International
Holdings BV.

Environment
Notwithstanding the tough economic conditions under which the company operates, key environmental projects remain a
focus area in order to ensure environmental compliance. The new emission abatement system for Vanderbijlparks sinter
plant achieved sustainable operating results from September 2012 onwards. At a total cost of R250 million, the project can
be regarded as a milestone as particulate emissions from this significant emission source are reduced by approximately
80%. 

Another important project that is in progress is the Newcastle zero effluent discharge project, which entails the
improvement of effluent treatment and recovery thereof with a planned completion date of early 2014 at an estimated cost of
R360 million.

On 22 October 2012 a compliance notice was issued by the provincial environmental authority (GDARD) to
Vanderbijlpark Works ordering the closure of the electric arc furnaces, coke batteries, sinter plant and foundry based on findings of
non-compliance with Atmospheric Emission Licence conditions. The EAFs were taken out of operation on 16 October 2012
prior to the notice being issued and the other affected operations continue pending the outcome of an objection that was
submitted to the MEC. 

The proposed carbon tax remains a major concern as it may have a significant impact on the production cost of steel.
The reviewed Carbon Tax Discussion Paper that was expected to be published during 2012 will now only be released in 2013
whereafter further discussions will continue with the relevant authorities.

Contingent liabilities
The Competition Commission (the Commission) has thus far referred the following four cases against the company to
the Competition Tribunal (the Tribunal) for prosecution. The company rejects the allegations made in each of these cases
and is defending itself accordingly.

First wire rod matter - alleged price discrimination conduct
In January 2007, the Commission referred a case against the company to the Tribunal relating to alleged price
discrimination on wire rod. The matter is yet to be set down for hearing before the Tribunal. 

Second wire rod matter - alleged price discrimination conduct
In November 2012, the Commission referred another case relating to alleged price discrimination in the wire rod market
to the Tribunal. This case is essentially the same as the case referred in January 2007. The parties and the issues are
identical save for the fact that the contravention alleged in this case, is alleged to have taken place during a later
period being 2004 to 2006.

Long steel matter - alleged cartel conduct
In September 2009, the Commission referred a case against the company and three other primary steel manufacturers in
South Africa to the Tribunal for alleged price fixing and market division in respect of certain long steel products.
 
The Commission requested the Tribunal to find the company guilty of the contraventions as alleged and to impose on it
an administrative penalty of 10% of 2008 turnover. In December 2009 the company filed an application with the Tribunal
for access to the Commissions investigation record to enable it to answer to the case against it. 

In September 2010, the Tribunal handed down judgment refusing the company access to the bulk of the documentation in
the Commissions investigation record. The Tribunal based its judgment on the fact that the documentation in question had
been claimed by one of the parties in the matter as confidential. The company subsequently appealed this judgment to
the Competition Appeal Court (the CAC). In April 2012 the CAC ruled essentially that the matter be referred back to the
Tribunal for a hearing to determine the validity of the confidentiality claims. The Commission appealed this ruling to
the Supreme Court of Appeal. The appeal is expected to be heard some time during 2013.

Flat steel matter - alleged conscious parallelism
On 30 March 2012, the Commission referred a case against the company and Evraz Highveld Steel and Vanadium Limited
(Highveld Steel) to the Tribunal for alleged price fixing and market division in respect of certain flat steel products.
The form of price fixing alleged by the Commission in this instance is one based on the conscious parallelism
phenomenon. This mainly relates to Highveld Steel increasing its prices each time the company increases its prices.

The Commission requested the Tribunal to find the company guilty of the contraventions as alleged and to impose on it,
an administrative penalty of 10% of the 2008 turnover.

Competition Commission investigations
The Commission is formally investigating two complaints against the company. The first involves alleged prohibited
vertical practices in respect of purchases of scrap steel. The second relates to alleged excessive pricing of tinplate and
flat steel in general. Joined to this investigation is an investigation into alleged excessive pricing arising from the
iron ore surcharge introduced by the company for the period May 2010 to July 2010. The company is cooperating fully with
the Commission in all these investigations and continues to deliver all information and documentation as and when
called upon to do so. 

Dispute with Sishen Iron Ore Company Proprietary Limited (SIOC)
The appeal application by ICT and the DMR against the High Courts decision delivered in December 2011 that SIOC was
awarded 100% of the mining rights in the Sishen mine and therefore the award to ICT was invalid, will be heard by the
Supreme Court of Appeal in February 2013.

The arbitration regarding the dispute between SIOC and the company relating to the termination of the iron ore supply
agreement by SIOC as a result of the mining rights issue referred to above, remains postponed until the finalisation of
the above appeal process. 

In December 2012, following a mediation process facilitated by the Department: Trade and Industry, the company and
SIOC agreed to an Interim Pricing Agreement (IPA) for the period January 2013 to December 2013.

Acquisition
The final approval of the transaction involving the iron ore exploration project in the Northern Cape by the Minister
in terms of the Minerals and Petroleum Resources Development Act, No 28 of 2002, was received. The exploration programme
is progressing according to plan and this should be concluded by the first quarter of 2013.

Dividends
No dividends were declared for the year ended 31 December 2012.

Changes to the Board of Directors
The following appointments and resignations occurred:
-   Resignation of Christophe Cornier as non-executive director on 24 January 2012. 
-   As announced on 20 November 2012, the Board appointed Matthias Wellhausen as Chief Financial Officer and as
executive director on 2 January 2013, freeing Rudolph Torlage to focus on projects of a strategic nature. Rudolph Torlage
resigned as an executive director effective 2 January 2013.
-   As announced on 24 January 2013, Johnson Njeke retired as non-executive director and Chariman of the Board on 4
February 2013. Mpho Makwana joins the Board as independent non-executive director with effect from 5 February 2013 and
succeeds Johnson Njeke as Chairman.

Outlook for quarter one 2013
We expect a turnaround from the loss-making position realised in the previous quarter to break-even in the first
quarter. This view is supported by a modest rise in international steel prices and domestic demand. Sales volumes are
expected to be higher amid restocking in the market and increased production volumes. Commercial coke sales on the other
hand will be down due to lower production by some ferrochrome producers participating in Eskoms electricity buy-back
programme.

On behalf of the Board
N Nyembezi-Heita (Chief Executive Officer)                        MJ Wellhausen (Chief Financial Officer)
1 February 2013

Notes to the reviewed condensed consolidated financial statements                                                                                                                                                
 1.     Basis of preparation                                                                                                                                
        The condensed reviewed consolidated financial statements have been prepared in compliance with the Listings Requirements of the JSE Limited, 
	the recognition and measurement requirements of International Financial Reporting Standards (IFRS), the requirements of International 
	Accounting Standards (IAS) 34, Interim Financial Reporting, SAICA Financial Reporting Guides as issued by the Accounting Practices Committee 
	and the South African Companies Act, No 71 of 2008. These statements were compiled under the supervision of Mr MJ Wellhausen, the Chief Financial Officer.
		
 2.     Significant accounting policies                                                                                                                                 
        These condensed reviewed group financial results for the year ended 31 December 2012 have been prepared on the historical cost basis, except for the 
	revaluation of financial instruments. The accounting policies and methods of computation applied in the presentation of the financial results of the group 
	are consistent with those applied for the year ended 31 December 2011. The results for the year ended 31 December 2012 included the results from 
	Coal of Africa Limited for the period 1 October 2011 to 30 September 2012.  
		
        During 2012 R159 million was transferred from provisions to trade and other payables respectively as there is more certainty on timing and amount due. 
	On the same basis, R43 million was transferred from provisions to borrowings and other payables.   
		
 3.     Independent review by the auditors                                                                                                                                 
        The condensed consolidated financial results have been reviewed by the companys auditors, Deloitte & Touche, in accordance with International Standards 
	on Review Engagements 2410. They expressed an unqualified review opinion on the final financial information. However, their report included an emphasis of 
	matter relating to the significant uncertain outcome of the dispute resolution process with SIOC regarding the supply of iron ore at cost plus 3%. A copy of 
	their report is available for inspection at the companys registered office. Any reference to future financial performance included in this announcement, has 
	not been reviewed or reported on by the companys auditors.  
		
                   Quarter ended (unaudited)                                                                                    Year ended                   
                                                                                                                        31 December    31 December   
          31 December     30 September     31 December                                                                         2012           2011   
                 2012             2012            2011                                                                     Reviewed        Audited  
                  108                4               5            4.     Finance and investment income                           60             31   
                    2                3               4                   Interest received from banks                            10             29   
                                                                         Interest received from joint                                
                    1                1               1                     ventures                                               3              2                
                                                                         Discounting rate adjustment of                                            
                  105                                                         the non-current provisions                         47                   
                   83              108             106            5.     Finance costs                                          334            168   
                                                                         Interest expense on bank                                  
                   27               19              24                     overdrafts and loans                                 103             32                 
                                                                         Interest expense on finance lease                          
                   17               17              17                     obligations                                           67             71                
                                                                         Discounting rate adjustment of                                          
                                    47              25                     the non-current provisions                                           22   
                                                                         Net foreign exchange (gains)/                             
                    1              (16)                                    losses on financing activities                         9           (124)                  
                                                                         Unwinding of the discounting                              
                                                                           effect in the present valued                                          
                                                                           carrying amount of the                                                
                   38               41              40                     non-current provisions                               155            167                                           
                  149              (50)            (82)           6.     Income tax expense/(credit)                            184            118   
                                                                         Current normal and deferred                               
                  149              (50)            (82)                    tax expense/(credit)                                 184            101                 
                                                                         Normal and deferred tax expense                                          
                                                                           recognised in relation to tax of                                           
                                                                           prior years                                                          (5)                                                   
                                                                         Secondary tax on companies                                             22   
                                                                  7.     Borrowings and other payables                                               
                  417              404             328                   Staff related payables                                 417            328   
                   10               10              20                   Loan                                                    10             20   
                  427              414             348                   Total                                                  427            348   
                                                                         Disclosed as:                                                               
                  270              259             241                   - non-current                                          270            241   
                  157              155             107                   - current                                              157            107   
                                                                  8.     Capital expenditure                                                         
                  433              215             525                   Incurred                                               875          1 190   
                  687              959             887                   Contracted                                             687            887   
                1 027              977             728                   Authorised but not contracted                        1 027            728   
                                                                  9.     Contingent liabilities                                                      
                    1                1               1                   Guarantees                                               1              1   
                  359              364             278            10.    Operating lease commitments                            359            278   
                  131              136              83                   Less than one year                                     131             83   
                                                                         More than one year and less than                       
                  219              218             190                     five years                                           219            190                    
                    9               10               5                   More than five years                                     9              5   
                                                                                                                                                     
  10.   Related party transactions                                                                                                                                
        The group is controlled by ArcelorMittal Holdings AG which effectively owns 52.02% of the companys shares. During the year the company and its 
	subsidiaries, in the ordinary course of business, entered into various sale and purchase transactions with associates and joint ventures. These 
	transactions occurred under terms that are no less favourable than those arranged with third parties.
		
  11.   Corporate governance                                                                                                                                 
        The group subscribes to the Code on Corporate Practices and Conduct as contained in the second King Report on corporate governance and is taking 
	the necessary steps to implement the principles as outlined in the third King Report.                                                                                                                                 

Forward looking statements
Certain statements in this release that are neither reported financial results nor other historical information, are
forward looking statements, including but not limited to, statements that are predictions of or indicate future earnings,
savings, synergies, events, trends, plans or objectives. Undue reliance should not be placed on such statements
because, by their nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors,
that could cause actual results and company plans and objectives to differ materially from those expressed or implied in
the forward looking statements (or from past results).

Registered Office: ArcelorMittal South Africa Limited, Room N3-5, Main Building Delfos Boulevard, Vanderbijlpark, 1911
Directors: 
Non-executive: MJN Njeke* (Chairman), DK Chugh, FA du Plessis*, M Macdonald*, S Maheshwari, LP Mondi, DCG Murray*, ND Orleyn*, G Urquijoº
Citizen of India  º Citizen of Spain  * Independent non-executive
Executive: N Nyembezi-Heita (Chief Executive Officer), MJ Wellhausen (Chief Financial Officer)
Company Secretary: Premium Corporate Consulting Services Proprietary Limited
Sponsor: Deutsche Securities (SA) Proprietary Limited, 87 Maude Street, Sandton, 2196, Private Bag X9933, Sandton, 2146
Transfer Secretaries: Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001, 
PO Box 61051, Marshalltown, 2107

This report is available on ArcelorMittal South Africas Web site at:
http://www.arcelormittal.com/southafrica/
Share queries: Please call the ArcelorMittal South Africa share care toll free on 0800 006 960 or +27 11 370 7850 

Date: 06/02/2013 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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