Wrap Text
Reviewed group interim financial results for the six months ended 30 June 2013
ArcelorMittal South Africa Limited
Registration number: 1989/002164/06
Share code: ACL
ISIN: ZAE 000134961
(ArcelorMittal South Africa, the company or the group)
Reviewed group interim financial results for the six months ended 30 June 2013
- Headline loss of 31 cents a share for the first half of the year due to fire in Q1
- Strong recovery of earnings in Q2 following the resumption of full production
- Healthy cash position maintained
Overview
Global steel demand remained subdued throughout the first half of the year. Underlying steel consumption was weak especially in Europe,
but did rise marginally in China and the US. After modest improvement during the first quarter, international steel prices declined during the
past three months, tracking the downward trend in raw material prices. In South Africa steel demand was mainly driven by restocking. Rather
disappointingly, activity relating to infrastructure development remained too low to lift steel demand. On the positive side, the weakening
in the rand exchange rate in May provided a strong underpin to our export sales towards the end of the half year although the impact on
shipments will only materialise in the third quarter.
Liquid steel production was 246 000 tonnes lower than prior year as a result of the fire in Vanderbijlpark in February. Production was
stable in all other plants and returned to normal in Vanderbijlpark during the second half of April. The repairs to the steelmaking plant in
Vanderbijlpark were completed in record time, leading to the lifting of the force majeure on 9 May 2013. Steel sales dropped 16% from June
last year to a total of 2.1 million tonnes whereas commercial coke sales were down 9%.
Safety performance was satisfactory, ending the first half with a lost time injury frequency rate of 0.66. This does however compare
unfavourably with the frequency rate of 0.60 at the same time last year.
ArcelorMittal South Africa recorded a headline loss of R123 million for the first half of the year. Ebitda for the period was R977
million, down 6% from a year earlier. The negative ebitda impact due to the fire is currently estimated at R765 million (unaudited). Overall
earnings rebounded strongly after normal operations resumed, with second quarter ebitda of R808 million, substantially up on the R169 million in
the first quarter and R224 million in the corresponding period last year.
The net cash position was flat at R1 106 million compared to the first quarter.
Key statistics
Quarter ended Six months ended Year ended
30 June 31 March 30 June 30 June 30 June 31 December
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Unaudited Reviewed Reviewed Audited
8 124 7 766 8 650 Revenue (R million) 15 890 17 792 32 291
808 169 224 Ebitda (R million) 977 1 041 1 121
778 156 179 Ebitda/tonne (R/t) 460 410 243
9.9 2.2 2.6 Ebitda margin (%) 6.1 5.9 3.5
441 (208) (198) Profit/(loss) from operations (R million) 233 260 (477)
135 (275) (177) Net (loss)/profit (R million) (140) 102 (508)
147 (270) (177) Headline (loss)/earnings (R million) (123) 106 (518)
37 (67) (44) Headline (loss)/earnings per share (cents) (31) 26 (129)
1 106 1 114 550 Net cash 1 106 550 884
Unaudited information
1 453 1 028 1 344 Liquid steel production (000 tonnes) 2 481 2 727 5 090
1 038 1 085 1 249 Steel sales (000 tonnes) 2 123 2 537 4 622
834 872 844 - Local 1 706 1 838 3 336
204 213 405 - Export 417 699 1 286
125 85 89 Commercial coke sales (000 tonnes) 210 232 460
81 64 83 Capacity utilisation (%) (unaudited) 73 75 66
0.95 0.37 0.60 Lost time injury frequency rate (unaudited) 0.66 0.60 0.61
Market review
International
Global steel demand remained sluggish despite tentative signs of recovery in some of the major economies. This is mainly attributed to the
uncertainty prevailing in the euro zone, with falling industrial production and high levels of unemployment depressing demand. Recent data
from the US indicates a strengthening in overall industrial production, a slight recovery in the housing market and automotive production,
thereby providing some stimulant for steel demand. However, global economic uncertainty continued to affect business confidence and steel
buying patterns especially in Europe, further exacerbated by a decline in the rate of growth in China. The sub-Saharan African region continued
to offer growth opportunities, with the widely publicised infrastructure-related projects in energy, rail, residential developments and
mining investment activities stimulating steel demand.
Domestic
The South African economy continues to bear the negative effects of the global economic slowdown, with weakening demand for manufactured
goods. The much anticipated infrastructure-related investments failed to materialise and activity in the mining industry was weak. There were
some positive trends in key data in recent months, mainly in the lower residential segment of the construction sector. The recent uptick in
the manufacturing purchasing index was primarily driven by improved exports in the machinery and automotive segments. Nevertheless, overall
industrial production and construction activity remain relatively weak which will hamper steel demand.
Financial review
Six months ended 30 June 2013 compared with six months ended 30 June 2012 (reviewed)
Revenue decreased by 11% to R15.9 billion year-on-year on the back of a 16% decline in steel shipments. The brunt of the decline was borne
by exports, which were down 40% compared to a 7% drop in domestic shipments. Flat and long steel shipments fell 20% and 9% respectively.
Average net realised prices increased by 6% with domestic prices up 2% while export prices rose 17%. Prices for flat steel were up 8% while
long steel rose 2%. Revenue from the Coke and Chemicals business of R828 million was 13% lower following a 9% decrease in commercial coke
sales volumes and 16% drop in net realised prices.
Cash costs of hot rolled coil rose marginally while those of billets dropped slightly. Import coal and pellets prices decreased by 42% and
7% respectively on a dollar basis while in rand terms import coal fell 26% with pellets rising 10%. Sishen iron ore prices are fixed on a
dollar basis but rose 20% in rand terms. Electricity, natural gas and scrap prices climbed 20%, 12% and 9% respectively with local coking
coal falling 15%. Primarily due to the fire, liquid steel production was 9% lower. Capacity utilisation for flat steel was 68% compared to 76%
in prior year. The equivalent figures for long steel were 82% and 74% respectively.
Operating profit declined by R27 million to a profit of R233 million. Financing cost of R212 million for the first half is R11 million
more than the corresponding period mainly due to higher net foreign exchange losses of R50 million partly offset by lower interest paid of R25
million as a result of a better net cash position and a lower discount rate adjustment on non-current provisions of R10 million.
Our share of the loss from equity accounted investments after taxation of R148 million compares unfavourably with a profit of R51 million
in the corresponding period last year due to lower income from Macsteel International Holdings BV and losses from Coal of Africa Limited and
Polokwane Iron Ore Company.
Quarter ended 30 June 2013 compared with quarter ended 31 March 2013 (unaudited)
Revenue increased by 5% quarter-on-quarter to R8.1 billion as a result of an 8% increase in average steel prices. Domestic and export
prices rose 7% and 15% respectively. Prices for flat steel were up 9% whilst long steel prices rose 7%. Both domestic and export shipments were
4% down with flat and long steel shipments declining 6% and 1% respectively. Revenue from the Coke and Chemicals business of R448 million
was 18% higher than the preceding quarter following a 47% increase in commercial coke sales volumes and 5% drop in net realised prices.
Cash costs of hot rolled coil increased by 8% with billets increasing 4%. Import coal and pellets prices respectively rose 4% and 5% in US
dollars and 8% in rand terms. Sishen ore prices remained flat on a dollar basis but up 16% in rand terms. Local coal prices dropped 12%
while electricity increased 25%. Due to the fire in first quarter, liquid steel production was 425 000 tonnes or 41% higher, resulting in a
rise in capacity utilisation for flat steel to 79% compared to 54% in the previous quarter. The equivalent figures for long steel were 84% and
81% respectively.
Operating profit increased by R649 million to a profit of R441 million. Financing costs rose by R72 million to a total of R142 million
primarily due to higher foreign exchange losses of R67 million resulting from the exchange rate impact on higher foreign creditors. Our share
of the loss from equity accounted investments after taxation of R66 million compares with a loss of R82 million in first quarter. This
relates to a lower loss from Coal of Africa Limited and Polokwane Iron Ore Company partly offset by lower income from Macsteel International
Holdings BV.
Environment (unaudited)
Notwithstanding the tough economic conditions the company operates under, key environmental projects remain a focus area in order to
ensure environmental compliance. The most important project in this regard is the Newcastle zero effluent discharge project which entails the
improvement of effluent treatment and the recovery thereof with a planned completion date of March 2014 at an estimated cost of R430 million.
The Carbon Tax Discussion Paper published on 2 May 2013 by the National Treasury does not address all the uncertainties regarding
the proposed carbon tax planned for implementation in January 2015. It is difficult to accurately assess the financial impact of the
proposed tax, but current estimations indicate that it could amount to more than R600 million per annum. Very limited opportunities exist to
reduce carbon emissions in the steel production process and no feasible low carbon alternatives exist at this stage to produce steel from iron
ore. Therefore, the intention of the carbon tax to change behaviour cannot be realised within the iron and steel industry. This aspect will be
raised further with the National Treasury.
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.
1st 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.
2nd 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 - 2006. Pleadings in this matter have
recently closed and this will now be set down for hearing. The Commission has indicated its intention to combine this case with the 1st wire rod
matter referred to above.
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 judgement refusing the company access to the bulk of the documentation in the Commissions
investigation record. The Tribunal based its judgement 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 judgement 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 SCA). On 31 May 2013 the SCA handed down judgement effectively
concurring with the CAC and ordering the Commission to pay the companys legal costs in respect of the appeal.
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 an administrative penalty
of 10% of 2008 turnover.
Competition commission investigations
The Commission is formally investigating one further complaint against the company. This 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 this
investigation 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)
On 28 March 2013 the Supreme Court of Appeal delivered judgement in terms of which the Court effectively agreed with the trial court that
SIOC was awarded 100% of the mining rights in the Sishen mine and therefore the award to Imperial Crown Trading 289 Propriety Limited
(ICT) was invalid. The Department of Mineral Resources and ICT subsequently lodged an application for leave to appeal this decision with the
Constitutional Court. This has been set down for hearing on 3 September 2013. The arbitration remains deferred pending the outcome of this
hearing.
Corporate governance (unaudited)
The Group complies with all significant requirements of the Code on Corporate Practices and Conduct as contained in the third King Report
on Corporate Governance.
Acquisitions (unaudited)
The exploration phase of the Northern Cape iron ore project was completed at the end of March 2013. The data is currently being assessed
prior to further work proceeding. We anticipate submitting an application for the mining rights in the third quarter.
Changes to the Board of Directors
Malcolm Macdonald resigned as a non-executive director with effect from 29 May 2013.
Outlook for quarter three 2013 (unaudited)
While international prices appear to have stabilised, lingering weakness in the domestic economy will continue to negatively affect steel demand.
Domestic sales are expected to remain flat and any increase in steel prices will be more than offset by increasing costs in particular, higher
winter electricity tariffs and iron ore. Accordingly, earnings are expected to be lower than the preceding quarter.
On behalf of the Board of Directors
N Nyembezi-Heita MJ Wellhausen
Chief Executive Officer Chief Financial Officer
24 July 2013
Condensed group statement of comprehensive income
Quarter ended Six months ended Year ended
30 June 31 March 30 June 30 June 30 June 31 December
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Unaudited In millions of rands Reviewed Reviewed Audited
8 124 7 766 8 650 Revenue 15 890 17 792 32 291
(5 183) (4 324) (5 163) Raw materials and consumables used (9 507) (10 275) (18 760)
(892) (802) (920) Employee costs (1 694) (1 722) (3 356)
(931) (663) (809) Energy (1 594) (1 541) (3 156)
Movement in inventories of finished
1 167 (497) (38) goods and work in progress 670 (497) (467)
(363) (373) (418) Depreciation (736) (773) (1 582)
(4) (4) (4) Amortisation of intangible assets (8) (8) (16)
(1 477) (1 311) (1 496) Other operating expenses (2 788) (2 716) (5 431)
441 (208) (198) Profit/(loss) from operations 233 260 (477)
16 2 Finance and investment income (note 4) 16 7 60
(142) (70) (110) Finance costs (Note 5) (212) (201) (334)
(Loss)/income from equity accounted
(66) (82) 42 investments (net of tax) (148) 51 59
233 (344) (264) (Loss)/profit before tax (111) 117 (692)
(98) 69 87 Income tax (expense)/credit (Note 6) (29) (15) 184
135 (275) (177) (Loss)/profit for the period (140) 102 (508)
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss
(12) Cash flow hedges (12)
Exchange differences on translation of
128 151 121 foreign operations 279 27 62
Gains/(losses) on available-for-sale
11 (6) (3) investment taken to equity 5 (24) (32)
Share of other comprehensive income/(loss)
37 38 5 of equity accounted investments 75 (2) 34
299 (92) (54) Total comprehensive income/(loss) for the period 207 103 (444)
(Loss)/profit attributable to:
135 (275) (177) Owners of the company (140) 102 (508)
Total comprehensive income/(loss) attributable to:
299 (92) (54) Owners of the company 207 103 (444)
Attributable (loss)/earnings per share (cents)
34 (69) (44) - basic (35) 25 (127)
34 (69) (44) - diluted (35) 25 (127)
Condensed group statement of financial position
As at As at As at As at
30 June 31 March 30 June 31 December
2013 2013 2012 2012
In millions of rands Reviewed Unaudited Reviewed Audited
Assets
Non-current assets 19 765 19 520 19 335 19 419
Property, plant and equipment 16 177 16 039 16 126 16 068
Intangible assets 125 118 118 121
Equity accounted investments 3 432 3 343 3 056 3 204
Other financial assets 31 20 35 26
Current assets 14 898 12 133 12 660 11 479
Inventories 9 583 8 463 8 762 8 761
Trade and other receivables 3 311 2 399 3 327 1 669
Taxation 139 150 18 154
Other financial assets 7 3 11
Cash and cash equivalents 1 865 1 114 550 884
Total assets 34 663 31 653 31 995 30 898
Equity and liabilities
Shareholders equity 22 458 22 156 22 782 22 242
Stated capital 37 37 37 37
Non-distributable reserves (1 970) (2 072) (2 169) (2 178)
Retained income 24 391 24 191 24 914 24 383
Non-current liabilities 4 037 3 921 4 466 4 091
Borrowings and other payables (Note 7) 255 243 254 270
Finance lease obligations 539 453 450 426
Deferred income tax liability 1 848 1 849 2 223 2 031
Provision for post-retirement medical costs 9 9 7 9
Non-current provisions 1 386 1 367 1 532 1 355
Current liabilities 8 168 5 576 4 747 4 565
Trade and other payables 6 710 4 841 4 293 3 922
Borrowings and other payables (Note 7) 899 151 148 157
Other financial liabilities 3
Finance lease obligations 90 63 55 77
Taxation 144 205 97
Current provisions 322 316 251 312
Total equity and liabilities 34 663 31 653 31 995 30 898
Condensed group statement of cash flows
Quarter ended Six months ended Year ended
30 June 31 March 30 June 30 June 30 June 31 December
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Unaudited In millions of rands Reviewed Reviewed Audited
436 592 933 Cash inflows from operating activities 1 028 627 1 776
690 595 978 Cash generated from operations 1 285 759 2 022
2 2 2 Interest income 4 6 10
(33) (30) (41) Finance cost (63) (91) (170)
(147) (1) Income tax paid (148) (20) (52)
(76) 26 (6) Realised foreign exchange movement (50) (27) (34)
(366) (271) (331) Cash outflows from investing activities (637) (430) (1 125)
(353) (221) (117) Investment to maintain operations (574) (196) (809)
(10) (18) (16) Investment to expand operations (28) (31) (66)
Shares acquired in associate and equity
(4) (34) (202) accounted investment (38) (207) (369)
1 3 Proceeds on disposal of assets 1 3 29
1 1 1 Investment income - interest 2 1 3
Dividend from equity accounted investments 87
639 (103) (53) Cash inflows/(outflows) from financing activities 536 (93) (231)
Increase/(repayment) of borrowings, finance lease
639 (103) (53) obligations and other payables 536 (93) (231)
709 218 549 Increase in cash and cash equivalents 927 104 420
42 12 3 Effect of foreign exchange rate changes 54 7 25
1 114 884 (2) Cash and cash equivalents at beginning of period 884 439 439
1 865 1 114 550 Cash and cash equivalents at end of period 1 865 550 884
Notes to the reviewed condensed group financial information
1. Basis of preparation
The reviewed consolidated condensed interim financial statements have been prepared in compliance with the Listings Requirements of the
JSE Limited, International Accounting Standard (IAS) 34, Interim Financial Reporting and the South African Companies Act, No. 71 of 2008,
as well as the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee. These statements were compiled under the
supervision of Mr MJ Wellhausen, the Chief Financial Officer.
2. Significant accounting policies
The condensed consolidated interim results have been prepared using accounting policies that comply with International Financial Reporting
Standards. The accounting policies and methods of computation applied in the presentation of the condensed interim financial statements are
consistent with those applied for the year ended 31 December 2012, except for the following new or revised standards, amendments thereto and
interpretations as issued by the International Accounting Standards Board, which are effective for the current reporting period that were
adopted:
- IAS 1 amendment Presentation of Financial Statements: Presentation of Items of Other Comprehensive Income - IFRS 10 Consolidated Financial Statements
- IFRS 11 Joint Arrangements
- IFRS 13 Fair Value Measurement
- IAS 28 Investments in Associates and Joint Ventures (2011)
- IAS 34 Interim Financial Reporting
3. Independent review by the auditors
The condensed consolidated interim results have been reviewed by the companys auditors, Deloitte & Touche, in accordance with International Standards
on Review Engagements 2410. They expressed an unqualified conclusion on the interim 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. The auditors
report does not necessarily report on all of the information contained in this announcement. Shareholders are therefore advised that in order to obtain
a full understanding of the nature of the auditors engagement they should obtain a copy of that report together with the accompanying financial
information from the companys registered office.
Quarter ended Six months ended Year ended
30 June 31 March 30 June 30 June 30 June 31 December
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Unaudited In millions of rands Reviewed Reviewed Audited
16 2 4. Finance and Investment Income 16 7 60
2 2 2 Interest received from banks 4 6 10
1 1 Interest received from joint ventures 2 1 3
(3) 13 Discounting rate adjustment of the non-current provisions 10 47
142 70 110 5. Finance costs 212 201 334
19 14 24 Interest expense on bank overdrafts and loans 33 58 103
14 16 17 Interest expense on finance lease obligations 30 33 67
24 Discounting rate adjustment of the non-current provision 10
71 4 8 Net foreign exchange losses on financing activities 75 25 9
Unwinding of the discounting effect in the present valued
38 36 37 carrying amount of non-current provisions 74 75 155
(98) 69 87 6. Income tax (expense)/credit (29) (15) 184
(81) 69 87 Current normal and deferred tax (expense)/credit (12) (15) 184
(6) Withholding tax on foreign dividends (6)
(11) Interest (11)
1 154 394 402 7. Borrowings and other payables 1 154 402 427
395 384 392 Staff-related payables 395 392 417
759 10 10 Loan 759 10 10
Disclosed as:
255 243 254 - non-current 255 254 270
899 151 148 - current 899 148 157
8. Capital expenditure
363 239 133 Incurred 602 227 875
565 673 769 Contracted 565 769 687
776 855 1 250 Authorised but not contracted 776 1 250 1 027
9. Contingent liabilities
1 1 1 Guarantees 1 1 1
327 353 368 10. Operating lease commitments 327 368 359
125 134 140 Less than one year 125 140 131
201 210 217 More than one year and less than five years 201 217 219
1 9 11 More than five years 1 11 9
11. Related party transactions
The group is controlled by ArcelorMittal Holdings A.G. which effectively owns 52.02% of the companys shares. During the period 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 to the company than those arranged with third parties.
12. Fair value measurements
Some of the groups financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table
gives information about how the fair values of these financial assets and financial liabilities are determined particularly the valuation techniques
and inputs used.
Financial assets/ Fair values as at period ended Fair Valuation techniques
financial liabilities value hierarchy and key inputs
30 June 31 March 30 June 31 December
2013 2013 2012 2012
In millions of rands Reviewed Unaudited Reviewed Audited
Available for sale 31 20 35 25 Level 1 Quoted prices in an active market
assets
Held for trading
(liabilities)/assets (3) 7 3 12 Level 1 Quoted prices in an active market
Level 1: fair value measurement are those derived from unadjusted quoted prices in active markets for identical assets or liabilities.
Condensed group statement of changes in equity
Total
Treasury share-
Stated share equity Other Retained holders
In millions of rands capital reserve reserves income equity
Balance at 1 January 2012 37 (3 918) 1 687 24 863 22 669
Total comprehensive income for the
period (net of income tax) 1 102 103
Share-based payment expense 10 10
Transfer of equity accounted earnings 51 (51)
Balance at 30 June 2012 (reviewed) 37 (3 918) 1 749 24 914 22 782
Total comprehensive income/(loss) for the period
(net of income tax) 63 (610) (547)
Management share trust: net treasury share purchases 5 5
Share-based payment expense 2 2
Transfer of equity accounted earnings (79) 79
Balance at 31 December 2012 (audited) 37 (3 918) 1 740 24 383 22 242
Total comprehensive income/(loss) for the period
(net of income tax) 183 (275) (92)
Share-based payment expense 5 5
Transfer of equity accounted earnings (82) 82
Balance at 31 March 2013 (unaudited) 37 (3 918) 1 846 24 190 22 155
Total comprehensive income for the period
(net of income tax) 164 135 299
Share-based payment expense 4 4
Transfer of equity accounted earnings (66) 66
Balance at 30 June 2013 (reviewed) 37 (3 918) 1 948 24 391 22 458
Segment information
Flat Steel Products
Quarter ended Six months ended Year ended
30 June 31 March 30 June 30 June 30 June 31 December
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Unaudited Reviewed Reviewed Audited
5 115 4 929 5 617 Revenue (R million) 10 044 11 287 20 991
4 848 4 735 5 408 - External 9 583 11 003 20 192
267 194 209 - Internal 461 284 799
290 (315) (51) Ebitda (R million) (25) 30 (266)
(292) (306) (347) Depreciation and amortisation (R million) (598) (632) (1 294)
(2) (621) (398) (Loss) from operations (R million) (623) (602) (1 560)
21 288 19 544 20 966 Assets (R million) 21 288 20 966 19 713
9 363 8 077 8 217 Liabilities (R million) 9 363 8 217 7 662
Unaudited information
970 565 894 Liquid steel production (000 tonnes) 1 535 1 875 3 554
659 702 837 Steel sales (000 tonnes) 1 361 1 703 3 138
538 557 553 - Local 1 095 1 198 2 223
121 145 284 - Export 266 505 915
79 54 85 Capacity utilisation (%) 68 76 65
Long Steel Products
Quarter ended Six months ended Year ended
30 June 31 March 30 June 30 June 30 June 31 December
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Unaudited Reviewed Reviewed Audited
3 084 2 885 3 116 Revenue (R million) 5 969 6 390 11 474
2 838 2 665 2 870 - External 5 503 5 863 10 289
246 220 246 - Internal 466 527 1 185
379 315 203 Ebitda (R million) 694 724 770
(72) (70) (74) Depreciation and amortisation (R million) (142) (146) (299)
307 245 129 Profit from operations (R million) 552 578 471
7 148 6 683 6 580 Assets (R million) 7 148 6 580 6 142
5 194 4 763 4 514 Liabilities (R million) 5 194 4 514 4 390
Unaudited information
483 463 450 Liquid steel production (000 tonnes) 946 852 1 536
379 383 412 Steel sales (000 tonnes) 762 834 1 484
296 315 291 - Local 611 640 1 113
83 68 121 - Export 151 194 371
84 81 78 Capacity utilisation (%) 82 74 67
Coke and Chemicals
Quarter ended Six months ended Year ended
30 June 31 March 30 June 30 June 30 June 31 December
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Unaudited Reviewed Reviewed Audited
448 380 372 Revenue (R million) 828 948 1 856
438 366 372 - External 804 926 1 810
10 14 - Internal 24 22 46
120 147 45 Ebitda (R million) 267 250 503
(8) (9) (9) Depreciation and amortisation (R million) (17) (18) (32)
112 138 36 Profit from operations (R million) 250 232 471
1 025 1 021 1 082 Assets (R million) 1 025 1 082 1 003
1 645 1 604 1 534 Liabilities (R million) 1 645 1 534 1 580
Unaudited information
119 91 134 Commercial coke produced (000 tonnes) 210 268 446
125 85 89 Commercial coke sales (000 tonnes) 210 232 460
24 28 26 Tar sales (000 tonnes) 52 56 109
Corporate and other
Quarter ended Six months ended Year ended
30 June 31 March 30 June 30 June 30 June 31 December
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Unaudited Reviewed Reviewed Audited
Operating profit before depreciation
19 22 27 and amortisation (R million) 41 37 114
Depreciation and amortisation
5 8 8 credit (R million) 13 15 27
24 30 35 Profit from operations (R million) 54 52 141
5 202 4 405 3 367 Assets (R million) 5 202 3 367 4 040
(3 997) (4 947) (5 052) Liabilities (R million) (3 997) (5 052) (4 976)
Salient features
Quarter ended Six months ended Year ended
30 June 31 March 30 June 30 June 30 June 31 December
2013 2013 2012 2013 2012 2012
Unaudited Unaudited Unaudited In millions of rands Reviewed Reviewed Audited
Reconciliation of earnings before interest,
taxation, depreciation and amortisation (Ebitda)
441 (208) (198) Profit/(loss) from operations 233 260 (477)
Adjusted for:
363 373 418 - Depreciation 736 773 1 582
4 4 4 - Amortisation of intangible assets 8 8 16
808 169 224 Ebitda 977 1 041 1 121
Reconciliation of headline (loss)/earnings
135 (275) (177) (Loss)/profit for the period (140) 102 (508)
Adjusted for:
17 7 - Loss on disposal of assets 24 5 (4)
(5) (2) - Tax effect (7) (1) (6)
147 (270) (177) Headline (loss)/earnings (123) 106 (518)
Headline (loss)/earnings per share (cents)
37 (67) (44) - basic (31) 26 (129)
37 (67) (44) - diluted (31) 26 (129)
Selected ratios (%)
Return on ordinary shareholders equity per annum
2.4 (5.0) (1.6) - attributable earnings (1.3) 0.9 (2.3)
2.6 (4.9) (1.6) - headline earnings/(loss) (1.1) 0.9 (2.3)
3.2 3.2 0.6 Net cash to equity 3.2 0.6 2.1
Share statistics
Ordinary shares (thousands)
401 202 401 202 401 202 - in issue 401 202 401 202 401 202
401 202 401 202 401 202 - weighted average number of shares 401 202 401 202 401 202
401 202 401 202 401 211 - diluted weighted average number of shares 401 202 401 240 401 202
32.35 28.44 52.40 Share price (closing) (Rand) 32.35 52.40 36.00
12 979 11 410 21 023 Market capitalisation (R million) 12 979 21 023 14 443
55.98 55.22 56.78 Net asset value per share (Rand) 55.98 56.78 55.44
Forward-looking statements
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 risks and uncertainties
whose impact 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). Any reference to future financial performance included in this announcement, has not
been reviewed or reported on by the companys auditors.
Other information
Registered office
ArcelorMittal South Africa Limited, Room N3-5, Main Building, Delfos Boulevard, Vanderbijlpark, 1911
Directors
Non-executive
PM Makwana* (Chairman), DK Chugh+, FA du Plessis*, S Maheshwari+, LP Mondi, DCG Murray*, ND Orleyn*, G Urquijoº
+Citizen of India ºCitizen of Spain *Independent non-executive
Executive
N Nyembezi-Heita (Chief Executive Officer), MJ Wellhausen# (Chief Financial Officer)
#Citizen of Germany
Company Secretary
Premium Corporate Consulting Services Proprietary Limited
Sponsor
Deutsche Securities (SA) Proprietary Limited, 87 Maude Street, Sandton, 2146
Private Bag X9933, Sandton, 2146
Transfer secretaries
Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, Johannesburg, 2107
Release date
1 August 2013
This report is available on the ArcelorMittal South Africa website 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: 01/08/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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