| Wed 11 Feb 2009, 8:00 | | ACL - ArcelorMittal South Africa Limited - Reviewed group financial results and |
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ACL
ACL
ACL - ArcelorMittal South Africa Limited - Reviewed group financial results and
dividend announcement for the year ended 31 December 2008
ArcelorMittal South Africa Limited
(Incorporated in the Republic of South Africa)
Registration number: 1989/002164/06
Share code: ACL
ISIN: ZAE000103453
("ArcelorMittal South Africa", "the company" or "the group")
Reviewed group financial results and dividend announcement for the year ended 31
December 2008
Revenue increased by 36% to R39,9 billion
Operating profit increased by 58% to R12,2 billion
Headline earnings increased by 65% to R9,5 billion
Final dividend 365 cents per share
Condensed group income statement
Year ended 31 December 2008 2007
Reviewed Audited
Rm Rm
Revenue (Note 2) 39 914 29 301
Raw materials and consumables used (18 556) (12 141)
Employee costs (2 598) (2 210)
Energy (1 474) (1 364)
Movement in inventories of finished goods and 1 844 (21)
work in progress
Impairment charge (Note 3) (121)
Depreciation (1 310) (1 088)
Amortisation of intangible assets (12) (11)
Other operating expenses (5 528) (4 763)
Profit from operations 12 159 7 703
Gains/(losses) on changes in foreign exchange 637 (131)
rates and financial instruments (Note 4)
Interest income 318 442
Finance costs (Note 5) (238) (117)
Income from investments 3 4
Income from equity accounted investments (net 331 270
of tax)
Impairment reversal (Note 6) 36
Profit before tax (Note 7) 13 246 8 171
Income tax expense (3 865) (2 455)
Profit for the year 9 381 5 716
Attributable to:
Owners of the company 9 381 5 716
Earnings per share (cents)
- basic 2 105 1 282
- diluted 2 097 1 279
Condensed group statement of comprehensive income
Year ended 31 December 2008 2007
Reviewed Audited
Rm Rm
Profit for the year 9 381 5 716
Other comprehensive income
Exchange differences on translation of foreign 591 (63)
operations
(Losses)/gains on available-for-sale investment (71) 62
taken to equity
Movement in gains and losses deferred to equity (91) (111)
on cash flow hedges
Income tax on income taken directly to equity 25 27
Total comprehensive income for the year 9 835 5 631
Attributable to:
Owners of the company 9 835 5 631
Condensed group statement of financial position
as at 31 December 2008 2007
Reviewed Audited
Rm Rm
Assets
Non-current assets 18 159 16 887
Property, plant and equipment 15 917 15 525
Intangible assets 71 58
Unlisted equity accounted investments (Note 8) 1 968 1 109
Other financial assets 203 195
Current assets 19 276 11 318
Inventories 8 642 4 790
Trade and other receivables 2 031 2 292
Taxation 108
Other financial assets 174 94
Cash and cash equivalents 8 429 4 034
Total assets 37 435 28 205
Equity and liabilities
Shareholders` equity 27 995 20 583
Stated capital 37 37
Non-distributable reserves 1 503 757
Retained income 26 455 19 789
Non-current liabilities 4 774 4 273
Borrowings and other payables 46 52
Finance lease obligations 314 328
Deferred income tax liability 2 526 2 603
Provision for post-retirement medical costs 9 7
Non-current provisions 1 879 1 283
Current liabilities 4 666 3 349
Trade and other payables 3 384 2 873
Borrowings and other payables 33 10
Finance lease obligations 40 88
Taxation 780
Other financial liability 157 67
Current provisions 272 311
Total equity and liabilities 37 435 28 205
Condensed group statement of cash flows
Year ended 31 December 2008 2007
Reviewed Audited
Rm Rm
Cash inflows from operating activities 5 511 4 623
Cash generated from operations 10 939 8 439
Interest income 318 442
Finance costs (59) (73)
Dividend paid (2 398) (1 948)
Income tax paid (3 087) (2 209)
Realised foreign exchange movement (202) (28)
Cash outflows from investing activities (1 813) (1 752)
Investment to maintain operations (1 413) (1 198)
Investment to expand operations (419) (654)
Proceeds from disposals of property, plant and 2 8
equipment
Investment in associate (16)
Investment income - interest 3 4
Dividend from equity accounted investments 14 104
Net cash inflow 3 698 2 871
Cash outflows from financing activities (121) (6 435)
Capital reduction (6 352)
Repayment of borrowings and finance lease (121) (83)
obligations
Increase/(decrease) in cash and cash 3 577 (3 564)
equivalents
Effect of foreign exchange rate changes 818 (152)
Cash and cash equivalents at beginning of year 4 034 7 750
Cash and cash equivalents at end of year 8 429 4 034
Segment information
IFRS 8, Operating Segments, requires operating segments to be identified on the
basis of internal reports about components of the group that are regularly
reviewed by the chief operating decision maker in order to allocate resources to
the segment and to assess its performance. In contrast, the predecessor Standard
(IAS 14 Segment Reporting) required an entity to identify two sets of segments
(business and geographical), using a risks and rewards approach, with the
entity`s "system of internal financial reporting to key management personnel"
serving only as the starting point for the identification of such segments.
Following the adoption of IFRS 8, the identification of the group`s reportable
segments has not changed, other than for the re-allocation of the Maputo Works
from the Corporate and Other- to the Long Carbon Steel Products segment,
following the commencement of operations at the unit in the current year. The
group`s reportable segments under IFRS 8 therefore are as follows:
- Flat Carbon Steel Products consisting of the Vanderbijlpark-and Saldanha
Works;
- Long Carbon Steel Products consisting of the Newcastle-, Vereeniging-and
Maputo Works;
- Coke and Chemicals undertaking the processing and marketing of by-products and
the production and marketing of commercial-grade coking coal; and
- Corporate and Other, housing the sales and marketing functions, shared
services, procurement and logistics activities, the decommissioned Pretoria
Works, available-for-sale investments and the results of the consolidated
subsidiaries and special purpose entities.
The income statement categories, gains and losses on changes in foreign exchange
rates and financial instruments, interest income, finance costs, income from
investments and after tax income from equity accounted investments are
unallocated and remain in Corporate.
Segment revenue
Year ended 31 December 2008 2007
Reviewed Audited
Rm Rm
Flat Carbon Steel Products
- external sales 24 447 18 612
- inter-segment sales 1 066 628
Long Carbon Steel Products
- external sales 11 936 8 666
- inter-segment sales 1 014 572
Coke and Chemicals
- external sales 3 496 2 022
- inter-segment sales 67 43
Adjustments and eliminations (2 112) (1 242)
Total revenue 39 914 29 301
Distributed as:
- Local 34 931 23 689
- Export
??Africa 2 752 2 695
??Europe 323 382
??Asia 1 696 2 388
??Other 212 147
Segment profit from operations
Year ended 31 December 2008 2007
Reviewed Audited
Rm Rm
Operating profit/(loss) before depreciation,
amortisation and impairment
- Flat Carbon Steel Products 8 112 5 265
- Long Carbon Steel Products 3 993 2 838
- Coke and Chemicals 1 781 765
- Corporate and Other (284) (66)
Depreciation and amortisation
- Flat Carbon Steel Products (1 105) (438)
- Long Carbon Steel Products (200) (186)
- Coke and Chemicals (38) (38)
- Corporate and Other 21 (437)
Impairment charge
- Long Carbon Steel Products (121)
Profit/(loss) from operations
- Flat Carbon Steel Products 7 007 4 827
- Long Carbon Steel Products 3 672 2 652
- Coke and Chemicals 1 743 727
- Corporate and Other (263) (503)
Profit from operations 12 159 7 703
Segment assets
Year ended 31 December 2008 2007
Reviewed Audited
Rm Rm
Flat Carbon Steel Products 20 198 18 244
Long Carbon Steel Products 5 097 4 007
Coke and Chemicals 1 130 1 043
Corporate and Other 11 010 4 911
Total assets 37 435 28 205
Unaudited supplementary physical information (`000 tonnes)
Year ended 31 December 2008 2007
Unaudited Unaudited
Flat Carbon Steel Products
Liquid steel production 4 084 4 231
Sales 3 412 3 920
Long Carbon Steel Products
Liquid steel production 1 690 2 144
Sales 1 677 1 899
Total
Liquid steel production 5 774 6 375
Sales 5 089 5 819
- local 4 375 4 422
- export 714 1 397
Local sales as percentage of total sales 86 76
Condensed group statement of changes in equity
Non-distributable reserves
Stated Capital Management Share- Attri
capital redemptio share based -butable
Rm n trust payment reserves
reserve Rm reserve of
Rm Rm equity
accounted
investment
s
Rm
Balance at 6 389 23 (106) 27 654
1 January 2007
Total comprehensive
income for the year
(net of income tax)
Management share (43)
trust: net treasury
share purchases
Share options 35
charge: IFRS 2
Dividend
Capital reduction (6 352)
Transfer of equity 166
accounted earnings
Balance at 37 23 (149) 62 820
31 December 2007
(Audited)
Total comprehensive
income for the year
(net of income tax)
Management share (58)
trust: net treasury
share purchases
Share options 33
charge: IFRS 2
Dividend
Transfer of equity 317
accounted earnings
Balance at 37 23 (207) 95 1 137
31 December 2008
(Reviewed)
Condensed group statement of changes in equity (continued)
Non-distributable reserves
Financial Trans- Cash flow Retained Total
assets lation hedge income Share-
available- of accounting Rm holders`
for-sale foreign Rm equity
Rm operation Rm
s
Rm
Balance at 56 30 16 187 23 260
1 January 2007
Total comprehensive 62 (63) (84) 5 716 5 631
income for the year
(net of income tax)
Management share (43)
trust: net treasury
share purchases
Share options 35
charge: IFRS 2
Dividend (1 948) (1 948)
Capital reduction (6 352)
Transfer of equity (166)
accounted earnings
Balance at 62 (7) (54) 19 789 20 583
31 December 2007
(Audited)
Total comprehensive (71) 591 (66) 9 381 9 835
income for the year
(net of income tax)
Management share (58)
trust: net treasury
share purchases
Share options 33
charge: IFRS 2
Dividend (2 398) (2 398)
Transfer of equity (317)
accounted earnings
Balance at (9) 584 (120) 26 455 27 995
31 December 2008
(Reviewed)
Salient features
Year ended 31 December 2008 2007
Reviewed Audited
Rm Rm
Reconciliation of earnings before interest,
taxation, depreciation and amortisation
(EBITDA)
Profit from operations 12 159 7 703
Adjusted for:
- impairment charge 121
- depreciation 1 310 1 088
- amortisation of intangible assets 12 11
EBITDA 13 602 8 802
Reconciliation of headline earnings
Profit for the year 9 381 5 716
Adjusted for:
- loss on disposal or scrapping of assets 39 31
- book value of assets held-for-sale written 4
off
- impairment charge 121
- impairment reversal (36)
- tax effect (21) (10)
Headline earnings 9 484 5 741
Headline earnings per share (cents)
- basic 2 128 1 288
- diluted 2 120 1 284
Selected ratios (%)
EBITDA margin 34,1 30,0
Return on ordinary shareholders` equity per
annum
- attributable earnings 38,6 26,1
- headline earnings 39,0 26,2
Net cash to equity 29,8 19,3
Share statistics
Ordinary shares (thousands)
- in issue 445 752 445 752
- weighted average number of shares 445 752 445 752
- diluted weighted average number of shares 447 433 447 052
Share price (closing) (R) 88,45 136,50
Market capitalisation (Rm) 39 427 60 845
Net asset value per share (cents) 6 280 4 618
Dividend per share (cents)
- interim 342 233
- final 365 196
Notes to the reviewed condensed consolidated financial statements
1. Basis of preparation
The condensed consolidated financial statements have been prepared
in compliance with the Listing Requirements of the JSE Limited,
International Financial Reporting Standards (IFRS) in particular
International Accounting Standard (IAS) 34, Interim Financial
Reporting as issued by the International Accounting Standards Board
(IASB) and Schedule 4 of the South African Companies Act, 1973, as
amended.
These condensed reviewed group financial results for the year ended
31 December 2008 have been prepared on the historical cost basis,
except for the revaluation of financial instruments.
The group has adopted all of the new and revised Standards and
Interpretations issued by the International Accounting Standards
Board (IASB) and the International Financial Reporting
Interpretations Committee (IFRIC) of the IASB that are relevant to
its operations and effective for accounting periods beginning on
1 January 2008.
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 2007, except for
the early adoption of:
-IAS1 (Revised), Presentation of Financial Statements (effective
from annual periods beginning on or after 1 January 2009).
-IFRS8, Operating Segments (effective from annual periods beginning
on or after 1 January 2009).
These two Standards have had an impact on the disclosure of the
financial results, but no impact on the financial results of the
group.
In addition to the above, the following Standards and
Interpretations have been adopted in advance of their effective date
with no impact on the group`s financial results or disclosures:
-IAS16 (Amendment), Property, Plant and Equipment and consequential
amendment to IAS7, Statement of Cash Flows (effective for annual
periods beginning on or after 1 January 2009);
-IAS19 (Amendment), Employee Benefits (effective for annual periods
beginning on or after 1 January 2009);
-IAS20 (Amendment), Accounting for government grants and disclosure
of government assistance (effective for annual periods beginning on
or after 1 January 2009);
-IAS23 (Amendment), Borrowing Costs (effective for annual periods
beginning on or after 1 January 2009);
-IAS27 (Revised), Consolidated and Separate Financial Statements,
and IFRS3 (Revised), Business combinations (effective for annual
periods beginning on or after 1 July 2009);
-IAS27 (Amendment), Consolidated and Separate Financial Statements
(effective for annual periods beginning on or after 1 January 2009);
-IAS28 (Amendment), Investments in Associates (and consequential
amendments to IAS32, Financial Instruments: Presentation, and IFRS7,
Financial Instruments: Disclosures) (effective for annual periods
beginning on or after 1 January 2009);
-IAS29 (Amendment), Financial Reporting in Hyperinflationary
Economies (effective for annual periods beginning on or after 1
January 2009);
-IAS31 (Amendment), Interests in Joint Ventures and consequential
amendments to IAS32 Financial Instruments: Presentation and IFRS7,
Financial Instruments: Disclosures (effective for annual periods
beginning on or after 1 January 2009);
-IAS32 (Amendment), Financial Instruments: Presentation, and IAS1
(Amendment), Presentation of Financial Statements - Puttable
Financial Instruments and Obligations Arising on Liquidation
(effective for annual periods beginning on or after 1 January 2009);
-IAS36 (Amendment), Impairment of Assets (effective for annual
periods beginning on or after 1 January 2009);
-IAS38 (Amendment), Intangible assets (effective for annual periods
beginning on or after 1 January 2009);
-IAS39 (Amendment), Financial Instruments: Recognition and
Measurement and IFRS7, Financial Instrument Disclosures (effective
for annual periods beginning on or after 1 July 2009);
-IAS39 (Amendment), Financial Instruments: Recognition and
Measurement (effective for annual periods beginning on or after 1
January 2009);
-IAS40 (Amendment), Investment Property and consequential amendments
to IAS16, Property, Plant and Equipment (effective for annual
periods beginning on or after 1 January 2009);
-IFRS1 (Amendment), First Time Adoption of IFRS, and IAS27,
Consolidated and Separate Financial Statements (effective for annual
periods beginning on or after 1 January 2009);
-IFRS2 (Amendment), Share-based Payment (effective for annual
periods beginning on or after 1 January 2009);
-IFRS5 (Amendment), Non-current Assets Held-for-Sale and
Discontinued Operations and consequential amendment to IFRS1, First-
time Adoption of IFRS (effective for annual periods beginning on or
after 1 July 2009);
-IFRIC15, Agreements for Construction of Real Estates (effective for
annual periods beginning on or after 1 January 2009); and
-IFRIC16, Hedges of a Net Investment in a Foreign Operation
(effective for annual periods beginning on or after 1 October 2008).
Year ended 31 December 2008 2007
Reviewed Audited
Rm Rm
2. Revenue 39 914 29 301
Sale of goods 39 914 29 298
Gains on derivative instruments in "designated" 3
cash flow hedge accounting relationships
The 2007 sale of goods amount was decreased with
R32 million to exclude the adjustments of sales
to joint ventures still in inventory at year-
end.
3. Impairment charge
An impairment charge of R93 million and R28
million has been recognised against the carrying
amounts of the Maputo Works and the Dunswart
Direct Reduction facility at the Vereeniging
Works respectively.
4. Gains/(losses) on changes in foreign exchange 637 (131)
rates and financial instruments
Gains on changes in foreign exchange rates 901 38
Losses on changes in foreign exchange rates (256) (188)
Fair value (losses)/gains transferred from (10) 3
equity on ineffective derivative instruments de-
designated as cash flow hedges
Gains on changes in the fair value of derivative 2 16
instruments designated as held for trading at
fair value through profit and loss
5. Finance costs (238) (117)
Interest expense on bank overdrafts and loans (13) (20)
Interest expense on finance lease obligations (46) (53)
Discounting rate adjustment of the non current (8) 79
provisions
Unwinding of the discounting effect in the (171) (123)
present valued carrying amount of the non-
current provisions
6. Impairment reversal
Following an impairment reversal against
property, plant and equipment by jointly
controlled entity, Microsteel (Proprietary)
Limited, a corresponding reversal of R36 million
impairment against the investment has been made.
7. Profit before taxation is arrived at after
Directors` remuneration
- executive 16 9
- non-executive 2 2
Auditors` remuneration
- audit fees 11 10
- other services and expenses 1 1
8. Unlisted equity accounted investments
Directors` valuation of unlisted equity 2 001 1 184
accounted investments
9. Capital expenditure
- incurred 1 832 1 852
- contracted 930 1 232
- authorised but not contracted 1 227 1 397
10. Contingent liabilities 705 1 059
- guarantees 1 32
- amount in legal trust 12 12
- litigation and claims 692 1 015
11. Operating lease commitments 156 162
- less than one year 79 46
- more than one year and less than five years 77 116
12. Related party transactions
The group is controlled by Mittal Steel Holdings AG which owns
52,02% of the company`s 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.
13. Directors` share option benefits
Rights to options and shares held by Executive Directors in terms of
the Management Share Scheme totalled 202 551 at 31 December 2008
(December 2007: 419 695), representing 0,05% (December 2007: 0,09%)
of the issued shares. During the year the directors sold a portion
of their options realising a gain of R10 million (December 2007: R7
million), which was also paid to them.
14. Corporate governance
The group subscribes to the Code on Corporate Practices and Conduct
as contained in the second King Report on corporate governance.
15. Review by external auditors
The group financial results have been reviewed by Deloitte & Touche
whose unmodified review opinion is available for inspection at the
company`s registered office.
Financial review
Headline earnings for 2008 improved by 65% to a record R9,5 billion despite a
sharp decline in earnings in the fourth quarter as the global economic crisis
spread to the steel industry. (See breakdown of quarterly earnings below.)
This substantial increase in annual earnings was driven by higher global steel
prices, a significantly improved income contribution from our Coke & Chemicals
business, as well as higher gains on foreign exchange transactions and financial
instruments. Lower sales volumes and escalating costs partially offset these
gains.
Hot rolled coil cash costs per tonne were up 59% year-on-year while the cost of
billets increased by 65% amid surging prices of major input materials, led by
coal, scrap and alloys. Scrap prices in particular rose steeply contributing to
the sharp escalation in the production cost of billets at our Vereeniging Works,
which is to a large extent scrap based.
Sales volumes were down 13% compared with 2007 as domestic and export sales
declined by 1% and 49% respectively. The sharp drop in exports can be explained
by our focus on meeting the demands of the local market first. Average net
export prices though were 45% higher in dollar terms and 70% in rand terms than
prices in 2007.
Quarterly headline earnings
Quarter to Rm US$m Exchange rate
March 2007 1 530 211 7,24
June 2007 1 624 229 7,10
Average 1 577 220 7,17
September 2007 1 055 148 7,11
December 2007 1 532 226 6,77
Average 1 294 187 6,94
March 2008 2 003 265 7,55
June 2008 2 573 330 7,79
Average 2 288 298 7,67
September 2008 3 772 485 7,78
December 2008 1 136 114 9,93
Average 2 454 300 8,86
Market review
International market
After a buoyant 2007, during which global steel consumption rose by 7,5%, growth
slowed in 2008 to an estimated 1%. Growth was experienced during the first seven
months of the year with global hot rolled coil prices reaching a high of $1 200
per tonne in July. However by year-end prices had dropped by 59,6% following
the collapse in the demand for steel since September amid the downturn in real
consumption and destocking by customers. This led to sharp production cutbacks
in all steel producing regions, starting with a year-on-year decline of 3,6% in
September and gradually accelerating to a 24% cut in output in December. China,
the world`s largest producer, raised its output by 1,7% last year after an
increase of 15,7% in 2007. It now accounts for 38,4% of total world steel output
(2007: 37,2%). Whereas the Chinese government instituted policies and measures
to curb steel production and exports in 2007, last year it announced the
suspension of a 5% export duty on hot rolled coil from December and introduced a
$586 billion stimulus package to boost infrastructure spending over the next two
years.
ArcelorMittal South Africa reduced its exports outside the African region to 6%
of total steel product sales from 12% in 2007, emphasising the strategy to focus
sales on the African continent.
Domestic market
Domestic demand for steel remained strong for the first three quarters of the
year, driven mainly by the increase in public sector infrastructure spending.
During the fourth quarter, however, the impact of the global financial crisis
spilled over to the local economy and led to a sharp decline in demand further
aggravated by destocking of inventory levels. In addition high interest and
inflation rates resulted in a slowdown in residential building activity as well
as reduced consumer spending on durable goods such as automotives and household
appliances. Figures by the South African Iron and Steel Institute (SAISI) show
that steel consumption declined from 5,9 million tonnes in 2007 to an estimated
5,6 million tonnes last year.
Operational review
Operating profits for 2008 increased by 58% year-on-year to R12,2 billion. The
Coke & Chemicals business boosted its operating income by 140%, Flat Carbon
Steel Products by 45% and Long Carbon Steel Products by 38%.
Liquid steel production for the year however was 9% lower compared to 2007
primarily due to the reline of the Corex and Midrex plants at Saldanha Works and
the mini-reline of Blast Furnace N5 at Newcastle Works during the first half of
the year. Further production cutbacks were implemented in the fourth quarter to
align output levels at our operations with falling demand. Other short-term
interventions to cushion the company against the worst effects of the global
financial crisis focussed on cost reduction and cash management initiatives.
Safety, health and environment
We remain committed to providing a safe workplace for our employees and
contractors and our "Journey to Zero" initiative is aimed at achieving zero
fatalities and injuries at our operations. Our operations set several safety
records last year despite a number of major refurbishments, including 3 million
man hours without a lost time injury at Vanderbijlpark Works and 2 million lost
time free man hours at Saldanha-and Newcastle Works. These achievements were
unfortunately marred by two fatalities during an accident at Saldanha Works in
September. After an extensive investigation, measures were introduced to
prevent a similar accident in future.
Environmental matters are a high priority for the company and a number of
projects were initiated or accelerated last year to fast-track the environmental
improvement programme and resolve issues raised by environmental authorities and
other stakeholders. We also finalised our longer-term capital expenditure plans
to improve our overall environmental performance.
Total environmental capital expenditure for the year amounted to R217 million of
which the following two projects stand out:
- The installation of a dust extraction system at Vereeniging Works` steelmaking
facilities is on track for completion early in 2010.
- The Coke Gas and Water Cleaning project at Vanderbijlpark Works has
experienced commissioning delays, but will be operational during the first
quarter of 2009 and lead to a reduction of 46% in SO2 emissions at the
operation.
Capital projects
The company completed two capital projects during the year that will
significantly improve the supply of liquid iron at its operations namely the
successful reline of the Corex and Midrex plants at Saldanha Works and the mini-
reline of Blast Furnace N5 at Newcastle Works.
The construction of two new Direct Reduction kilns at Vanderbijlpark Works is
also nearing completion. Once completed the kilns will enable the company to
become less reliant on scrap as feedstock to the Electric Arc Furnaces, while at
the same time adding 220 000 tonnes of liquid steel to our manufacturing
capacity.
The global economic crisis has forced us to reconsider our expansion programme,
but we remain committed to growing our business in the medium to long term and
continue to monitor all indicators to optimise the timing of our capital
expenditure plan.
Contingent liabilities
In the case brought before the Competition Tribunal by gold miners Harmony Gold
Mining Company Limited and DRD Gold Limited alleging excessive pricing, an
appeal hearing took place before the Competitions Appeal Court in October 2008.
The ruling is still pending. The administrative penalty imposed by the
Competition Tribunal of R692 million remains disclosed as a contingent liability
and no amount has been raised as a provision.
In another case brought before the Competition Tribunal by Barnes Fencing
Industries Limited D relating to alleged price and payment discrimination on the
sale of low carbon wire rod products D a date for the plea hearing and the
beginning of the initial proceedings is awaited.
Changes to the board of directors
- Mr M Mukherjee resigned as non-executive director with effect from 13 May
2008.
- Mr CPD Cornier has been appointed as non-executive with effect from 14 May
2008.
- Mr MAL Wurth resigned as non-executive director with effect from 30 November
2008.
- Mr AMHO Poupart-Lafarge has been appointed as non-executive director with
effect from 30 November 2008.
Outlook for quarter one 2009
Earnings for the first quarter of 2009 are set to fall substantially compared to
the fourth quarter of 2008, as the full impact of the decline in steel prices
will be felt. Furthermore the drop in the cost of input materials, especially
coal, will only start to flow through from the second quarter. The decline in
earnings will be further aggravated by lower income expected from the Coke &
Chemicals business due to reduced demand for market coke from the ferro-alloy
industry.
Domestic steel demand is expected to remain under pressure for at least the
first half of 2009. A decline in inflation, further possible interest rate cuts
and Government`s commitment to continue with its infrastructure programme could
boost consumer and investment spending towards the latter part of the year.
Global production and consumption in 2009 are also forecast to be below 2008
levels. A return to stability is only expected in the second half of the year
when production cuts should bring the market closer to equilibrium.
Dividend announcement
In line with company policy, the Board has declared a final cash dividend of 365
cents (2007: 196 cents), covered approximately three times by headline earnings.
Payment in South African Rands will be made to shareholders recorded in the
register at the close of business on the record date. The salient dates for
shareholders are:
Last date to trade shares cum dividend Friday, 6 March 2009
Shares commence trading ex dividend Monday, 9 March 2009
Record date Friday, 13 March 2009
Dividend payment date Monday, 16 March 2009
Share certificates may not be dematerialised or rematerialised between Monday, 9
March 2009 and Friday, 13 March 2009, both days inclusive. Dividend
entitlements of less than ten rand will be donated to charity in terms of the
articles of association.
On behalf of the Board
N Nyembezi-Heita (Chief Executive Officer)
HJ Verster (Executive Director Finance)
29 January 2009
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). The outlook for Quarter 1
2009 has not been subject to review by the company`s auditors.
Directors:
Non-executive: Dr KDK Mokhele (Chairman)*, DK Chugh, CPD Cornier#, EK Diack*, S
Maheshwari, LP Mondi, DCG Murray*, MJN Njeke*,
ND Orleyn*, AMHO Poupart-Lafarge#
Executive: N Nyembezi-Heita (Chief Executive Officer), Dr LGJJ Bontex
(President), HJ Verster (Executive Director Finance)
Citizen of India xCitizen of Belgium #Citizen of France *Independent non-
executive
Company Secretary: C Singh
Registered Office: ArcelorMittal South Africa Limited,
Room N3-5, Main Building, Delfos Boulevard, Vanderbijlpark 1911
Transfer Secretaries: Computershare Investor Services (Proprietary) Limited 70
Marshall Street, Johannesburg, 2001
P.O. Box 61051, Marshalltown, Johannesburg, 2107
Sponsor: Deutsche Securities (SA) (Proprietary) Limited
87 Maude Street, Sandton, 2146 Private Bag X9933, Sandton, 2143
This report is available on the ArcelorMittal South Africa`s 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
Vanderbijlpark
11 February 2009
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 11/02/2009 08:00:03 Produced by the JSE SENS Department.
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