| Wed 28 Jul 2010, 7:05 | | ACL - ArcelorMittal South Africa Limited - Reviewed group interim financial |
|
ACL
ACL
ACL - ArcelorMittal South Africa Limited - Reviewed group interim financial
results and dividend announcement for the six months ended 30 June 2010
ArcelorMittal South Africa Limited
(Incorporated in the Republic of South Africa)
Registration number: 1989/002164/06
Share code: ACL ISIN: ZAE 000134961
("ArcelorMittal South Africa", "the company" or "the group")
Reviewed group interim financial results and dividend announcement for the six
months ended 30 June 2010
* Sales volume up by 31%
* Operating profit of R2.3 billion
* Headline earnings of R1.8 billion
Financial review
ArcelorMittal South Africa has posted headline earnings of R1 804 million for
the first six months of 2010 compared to a loss of R844 million during the
corresponding period last year and a profit of R404 million in the preceding six
months. This turnaround was achieved on the back of a marked improvement in
market conditions post the financial crisis, both in terms of sales volumes and
prices. The Rand strengthened considerably since the first six months of 2009
and limited the improvement in the results.
The company`s total steel sales for the first half 2010 were 2.7 million tonnes,
31% higher than the corresponding period last year and 12% higher than the
preceding six months.
Net realised prices were on average 8% higher than the preceding six months and
remained at the same level as the corresponding period last year. In US Dollar
terms however, prices were up 22% compared to the first six months last year due
to the strengthening of the Rand from an average Rand/US Dollar exchange rate of
9.22 to 7.54.
The cash cost of steel sales for the first half 2010 decreased by 15% compared
to the corresponding period last year driven by lower costs of coking coal and
alloys as well as higher volumes. Compared to the preceding six months, the cash
cost of steel sales decreased by 7%.
Quarterly headline earnings/(loss) (unaudited)
Quarter to US$m Rm Exchange rate
March 2008 265 2 003 7.55
June 2008 330 2 573 7.79
Average 298 2 288 7.67
September 2008 485 3 772 7.78
December 2008 114 1 136 9.93
Average 300 2 454 8.86
March 2009 (24) (237) 9.96
June 2009 (72) (607) 8.48
Average (48) (422) 9.22
September 2009 (8) (65) 7.81
December 2009 63 469 7.49
Average 28 202 7.65
March 2010 99 748 7.52
June 2010 140 1 056 7.55
Average 120 902 7.54
Market review
International
During the first quarter 2010 apparent steel demand increased above the levels
supported by restocking (outside China) and rapidly rising steel prices in
almost all regions, driven by increasing raw materials costs. However, during
the second quarter markets in almost all regions started to soften. In EU
countries, economic instability emanating from renewed financial turmoil had a
negative effect on market confidence. In Asia, prices for finished steel
products started to fall during Q2 2010, especially in the case of flat
products. Government measures to tighten liquidity and take some inflationary
heat out of the economy have dampened business confidence. Demand for both flat
and long steel products in Africa remained relatively stable.
Demand in China remains strong on the back of an expected real GDP growth rate
of 10% for 2010, up from an already impressive 9% in 2009. ArcelorMittal South
Africa`s exports increased by 10% compared to the preceding six months and by
17% compared to a year ago.
Domestic
Growth in real GDP accelerated to an annualised rate of 4.6% in the first
quarter, its highest level in seven quarters, following an increase of 3.2% in
the fourth quarter of 2009 and a low of -7.4% in the first quarter of 2009.
Sales to the domestic market during the first half of 2010 increased by 37%
compared to a year ago and by 13% compared to the second half of 2009.
The positive growth in sales was boosted by the 2010 FIFA World Cup with
increased consumer spending and the infrastructural development initiatives that
took effect. However, merchants are experiencing a slowdown in activities and do
not expect any improvement during the second half of this year.
Segmental review
Flat Carbon Steel Products
The flat products business posted an operating profit of R1 157 million compared
to a loss of R577 million during the corresponding period last year and a loss
of R37 million during the preceding six months.
Sales increased by 32% from a year ago to 1 772 000 tonnes, up 17% on the
previous six months. On average, sales prices in Rand terms were 2% higher than
prices achieved a year ago and increased by 6% compared to the preceding six
months.
Liquid steel production increased by 34% compared to the corresponding period
last year, up 7% on the previous six months. Production levels increased to
approximately 72% of capacity compared to 54% a year ago. The cash cost of
production for hot rolled coil decreased by 11% compared to the corresponding
period last year and increased by 2% compared to the previous six months.
Long Carbon Steel Products
The long products business posted an operating profit of R712 million compared
to a loss of R12 million during the corresponding period last year and a profit
of R327 million recorded during the preceding six months.
Sales increased by 29% to 928 000 tonnes compared to the same period last year
and 4% compared to the preceding six months. Sales prices in Rand terms on
average were 5% below the prices achieved a year ago due to higher volatility of
long steel prices but increased by 11% compared to the preceding six months.
Liquid steel production increased by 18% compared to the corresponding period
last year and was 2% down on the previous six months. Production levels
increased to approximately 87% of capacity compared to 74% a year ago. The cash
cost of production for billets decreased by 14% compared to the corresponding
period last year and increased by 9% compared to the preceding six months.
Coke and Chemicals
The Coke and Chemicals business posted an operating profit of R481 million
compared to a profit of R95 million during the corresponding period last year
and a profit of R354 million during the preceding six months. Sales of 301 000
tonnes increased by 300% from a year ago due to a sharp rise in demand from the
ferro-alloy industry. However, compared to the preceding six months, sales
dropped 31 000 tonnes. Chinese coke prices increased by 16% compared to prices
achieved a year ago and remained in line with the preceding six months.
Safety, Health and Environment
Our lost-time injury frequency rate, measured over a million man hours, improved
to 1.4 at the end of June 2010 from 1.7 at 30 June 2009 and 2.6 as at the end of
December 2009. There were no fatalities during this period. A number of concrete
measures were taken to reinforce adherence to safety standards and entrench a
positive safety culture.
The implementation of the company`s environmental programme to improve emissions
to air, waste management and water management is gaining momentum and will add
to the successes achieved thus far. The three most important projects the
company is pursuing at the moment are:
* Installation of a new emission abatement system for the sinter plant at
Vanderbijlpark Works.
* The achievement of zero effluent discharge status at Newcastle Works.
* Installation of a new desulphurisation plant at Newcastle Works.
Progress was made to date to prepare the company to comply with the new air
emission standards promulgated on 31 March 2010 as part of the new Air Quality
Act. Significant investment will be required at the company`s coke production
facilities and improvement projects will commence in quarter three 2010.
Capital projects
The approval and execution of capital projects continued within the normal
budgetary framework. The full spectrum of environmental, maintenance and
business optimisation is addressed according to agreed priorities.
Dispute with Sishen Iron Ore Company (Proprietary) Limited ("SIOC")
ArcelorMittal South Africa received a notice from SIOC on 5 February 2010,
asserting that with effect from 1 March 2010, it will no longer supply iron ore
to ArcelorMittal South Africa on a cost plus 3% basis as provided for in the
supply agreement concluded between the parties in 2001, on the grounds that
ArcelorMittal South Africa has lost its 21.4% undivided share in the mineral
rights at the Sishen mine. ArcelorMittal South Africa has rejected this
assertion and is of the firm opinion that SIOC is obliged to continue to supply
iron ore to ArcelorMittal South Africa at cost plus 3%. The parties have
commenced arbitration proceedings to resolve the abovementioned dispute.
Following discussions between the parties and with regulatory authorities, on 21
July 2010 an interim iron ore supply and pricing agreement ("interim
agreement"), effective from 1 March 2010 to 31 July 2011, was concluded. In
terms of this agreement iron ore will be supplied to Saldanha Works at a fixed
price of USD50 per ton free-on-rail (FOR); the inland plants will receive iron
ore at a fixed price of USD70 per ton FOR, for both lump and fine material. The
total volumes to be received on this basis will not exceed 6.25 million tonnes
per annum as per the contract.
As announced previously, ArcelorMittal South Africa imposed a surcharge on its
domestic sales to compensate for the iron ore cost increase.In view of the
interim agreement, ArcelorMittal South Africa will, with effect from 1 August
2010, charge a single all-in price, reflecting the higher cost of iron ore,
rather than a separate surcharge as had been charged previously. ArcelorMittal
South Africa`s customers have been informed of this revision in its commercial
policy.
The extra amount that is now due and payable to SIOC exceeds the funds that were
raised as the surcharge over the last few months and, therefore, these
accumulated surcharge funds and the shortfall will be paid over to SIOC.
This interim agreement has no bearing on the arbitration process currently
underway or ArcelorMittal South Africa`s conviction that the supply agreement
remains legally valid and binding on the parties.
Competition Commission investigations
The Competition Commission ("Commission") is formally investigating four cases
against ArcelorMittal South Africa. None of these have been referred by the
Commission to the Competition Tribunal ("Tribunal"). The first case involves
alleged price fixing in the flat steel market and the second case, alleged
prohibited pricing behaviour in the tinplate market. The third investigation
involves alleged prohibited vertical practices in respect of purchases of scrap
steel. The fourth investigation appears to involve an extension of the Barnes
Fencing Industries Limited case described below into a later period. The
allegations concern essentially the same conduct as in the Barnes Fencing case.
The company is co-operating fully with the Commission in these investigations.
Contingent liabilities
* The case brought before the Tribunal by Barnes Fencing Industries Limited
relating to alleged price and exclusionary conduct on the sale of low-carbon
wire-rod products is continuing in accordance with Tribunal procedures. A date
for the hearing has not been set.
* The Commission has referred ArcelorMittal South Africa and three other primary
steel producers in South Africa to the Tribunal for alleged price fixing and
market division in respect of certain long steel products. The Commission has
recommended the imposition of a financial penalty of 10% of the company`s 2008
annual turnover. The parties and the Commission are engaged in preliminary
applications regarding access to documents. The matter continues.
Dividend announcement
In line with the company`s policy, the board declared an interim cash dividend
of 150 cents, covered approximately three times by headline earnings. Payment in
South African Rand 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, 27 August 2010
Shares commence trading ex-dividend Monday, 30 August 2010
Record date Friday, 3 September 2010
Dividend payment date Monday, 6 September 2010
Share certificates may not be dematerialised or rematerialised between Monday,
30 August 2010 and Friday, 3 September 2010, both days inclusive. Dividend
entitlements of less than R10 will be donated to charity in terms of the
articles of association.
Resignation of directors
EK Diack resigned as independent non-executive director with effect from 9 July
2010. HJ Verster has resigned as Chief Financial Officer and this will be with
effect from 23 August 2010. RH Torlage, currently the General Manager
Controlling, has been appointed as the interim Acting Chief Financial Officer.
Outlook for quarter three 2010
The earnings for the third quarter are expected to decline compared to the
previous quarter due to lower international steel prices and demand together
with input material costs that still remain at high levels.
On behalf of the board of directors
NMC Nyembezi-Heita (Chief Executive Officer)
HJ Verster (Chief Financial Officer)
26 July 2010
Condensed group income statement
Six months ended Year ended
30 June 30 June 31 December
2010 2009 2009
Reviewed Reviewed Audited
Rm Rm Rm
Revenue 16 165 11 960 25 598
Raw materials and consumables used (8 267) (6 903) (14 003)
Employee costs (1 486) (1 310) (2 640)
Energy (1 097) (784) (2 062)
Movement in inventories of finished 390 (1 062) (1 296)
goods and work in progress
Impairment charge (26)
Depreciation (682) (572) (1 279)
Amortisation of intangible assets (6) (6) (13)
Other operating expenses (2 668) (1 645) (4 050)
Profit/(loss) from operations 2 349 (322) 229
Gains/(losses) on changes in foreign 113 (695) (813)
exchange rates and financial
instruments (note 5)
Interest income 24 183 199
Finance costs (note 6) (176) (141) (276)
Income from investments 1 1 3
Income from equity-accounted 135 41 206
investments (net of tax)
Impairment reversal 9
Profit/(loss) before tax 2 446 (933) (443)
Income tax expense (note 7) (669) 85 (35)
Profit/(loss) for the period 1 777 (848) (478)
Attributable to:
Owners of the company 1 777 (848) (478)
Earnings/(loss) per share (cents)
- basic 443 (190) (113)
- diluted 442 (190) (113)
Condensed group statement of comprehensive income
Six months ended Year ended
30 June 30 June 31 December
2010 2009 2009
Reviewed Reviewed Audited
Rm Rm Rm
Profit/(loss) for the period 1 777 (848) (478)
Other comprehensive income
Exchange differences on translation 63 (318) (380)
of foreign operations
(Losses)/gains on available-for-sale (12) 37
investment taken to equity
Movement in gains and losses 8 117 158
deferred to equity on cash flow
hedges
Share of other comprehensive income 104 (23) 135
of equity-accounted investments
Income tax on (expenses)/income (9) (33) (40)
taken directly to equity
Total comprehensive income/(loss) 1 931 (1 105) (568)
for the period
Attributable to:
Owners of the company 1 931 (1 105) (568)
Condensed group statement of financial position
As at As at As at
30 June 30 June 31 December
2010 2009 2009
Reviewed Reviewed Audited
Rm Rm Rm
Assets
Non-current assets 18 630 18 321 18 490
Property, plant and equipment 15 573 15 981 15 862
Intangible assets 75 66 72
Equity-accounted investments (note 2 760 2 062 2 369
8)
Other financial assets 222 212 187
Current assets 15 598 11 658 12 294
Inventories 6 918 5 863 5 767
Trade and other receivables 3 380 2 625 2 096
Other financial assets 121 163 83
Cash and cash equivalents 5 179 3 007 4 348
Total assets 34 228 29 979 30 784
Equity and liabilities
Shareholders` equity 23 860 21 360 21 925
Stated capital 37 37 37
Non-distributable reserves (2 051) (2 616) (2 344)
Retained income 25 874 23 939 24 232
Non-current liabilities 4 714 4 751 4 632
Borrowings and other payables 214 267 220
Finance lease obligations 551 623 557
Deferred income tax liability 2 426 2 301 2 435
Provision for post-retirement 8 8 8
medical costs
Non-current provisions 1 515 1 552 1 412
Current liabilities 5 654 3 868 4 227
Trade and other payables 4 986 3 325 3 496
Borrowings and other payables 79 10 153
Finance lease obligations 56 38 57
Other financial liability 39 3
Taxation 305 310 8
Current provisions 228 146 510
Total equity and liabilities 34 228 29 979 30 784
Condensed group statement of cash flows
Six months ended Year ended
30 June 30 June 31 December
2010 2009 2009
Reviewed Reviewed Audited
Rm Rm Rm
Cash in/(out)flows from operating 1 309 (119) 1 693
activities
Cash generated from operations 1 737 2 051 4 705
Interest income 24 183 199
Finance cost (43) (58) (121)
Dividend paid (note 9) (1 627) (1 627)
Income tax paid (387) (640) (934)
Realised foreign exchange movement (22) (28) (529)
Cash outflows from investing (453) (743) (1 346)
activities
Investment to maintain operations (259) (235) (784)
Investment to expand operations (97) (104) (130)
Shares acquired in associate (98) (405) (524)
Investment income - interest 1 1 3
Dividend from equity-accounted 89
investments
Net cash in/(out)flow 856 (862) 347
Cash outflows from financing (159) (3 915) (4 067)
activities
Repayment of borrowings, finance (159) 3 (149)
lease obligations and other payables
Repurchase of shares (3 918) (3 918)
Increase/(decrease) in cash and cash 697 (4 777) (3 720)
equivalents
Effect of foreign exchange rate 134 (645) (361)
changes
Cash and cash equivalents at 4 348 8 429 8 429
beginning of period
Cash and cash equivalents at end of 5 179 3 007 4 348
period
Notes to the reviewed condensed consolidated financial statements
1. Basis of preparation
The condensed consolidated 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 Schedule 4 of the South African Companies
Act, No. 61 of 1973, as amended as well as the AC500 standards as
issued by the Accounting Practices Board or its successor.
The interim price agreement concluded between the company and
SIOC after 30 June 2010 provided evidence regarding an uncertain
condition that existed at 30 June 2010 and of the outcome of a
contingent liability that was disclosed as such, as at that date.
Consequently iron ore delivered to Saldanha Steel and
Vanderbijlpark and Newcastle Works for the period from 1 March
2010 to 30 June 2010 has been recognised at the agreed interim
prices. A liability to SIOC was recognised for the difference
between cost plus 3% and the agreed interim prices. This
adjustment also impacted revenue, cost of sales, inventory and
tax.
2. Significant accounting policies
The condensed consolidated interim financial statements 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 interim
financial statements are consistent with those applied for the
year ended 31 December 2009.
3. Independent review by the auditors
The condensed consolidated interim results have been reviewed by
the company`s 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 at
cost plus 3%. A copy of their report is available for inspection
at the company`s registered office. Any reference to future
financial performance included in this announcement, has not been
reviewed or reported on by the company`s auditors.
4. Impairment of property, plant and equipment
An impairment review was performed as at 30 June 2010 on Saldanha
Steel (Proprietary) Limited (Saldanha Steel). The impairment
results together with the uncertain ultimate outcome of the
arbitration process with SIOC do not support an impairment at
30 June 2010.
Six months ended Year ended
30 June 30 June 31 December
2010 2009 2009
Reviewed Reviewed Audited
Rm Rm Rm
5. Gains/(losses) on changes in 113 (695) (813)
foreign exchange rates and
financial instruments
Gains on changes in foreign 147 105 103
exchange rates
Losses on changes in foreign (31) (777) (900)
exchange rates
Losses on changes in the fair (3) (7)
value of derivative instruments
designated as fair value through
profit and loss
Fair value losses transferred (16) (16)
from equity on ineffective
derivative instruments
designated as cash flow hedges
6. Finance costs (176) (141) (276)
Interest expense on bank (4) (20) (43)
overdrafts and loans
Interest expense on finance (39) (38) (78)
lease obligations
Discounting rate adjustment of (43) 15 48
the non-current provision
Unwinding of the discounting (90) (98) (203)
effect in the present valued
carrying amount of non-current
provisions
7. Income tax expense
Income tax is accrued based on
the estimated average annual
effective income tax rate of
27.4% (six months ended 30 June
2009: 9.1%)
8. Equity-accounted investments
Directors` valuation of unlisted 3 134 2 327 2 783
and listed shares in joint
ventures and associates
9. Dividend paid
Cash dividend 1 627 1 627
10. Capital expenditure
- incurred 356 339 914
- authorised and contracted 709 658 560
- authorised but not contracted 979 845 972
11. Contingent liabilities 705 4
- face value of financial 1 4
guarantee contracts issued in
the normal course of business
- amounts in legal trust 12
accounts
- litigation and claims 692
12. Operating lease commitments 37 114 51
- less than one year 25 69 35
- more than one year and less 12 45 16
than five years
13. Related party transactions
The Group is controlled by ArcelorMittal Holdings AG which
effectively owns 52.02% of the company`s 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 than those arranged with
third parties.
14. Corporate governance
The group fully supports the Code on Corporate Practices and
Conduct as contained in the second King Report on Corporate
Governance and is taking steps to comply with King III.
Segment revenue
Six months ended Year ended
30 June 30 June 31 December
2010 2009 2009
Reviewed Reviewed Audited
Rm Rm Rm
Flat Carbon Steel Products
- external sales 10 224 7 627 15 889
- inter-segment sales 234 128 403
Long Carbon Steel Products
- external sales 4 778 3 901 8 112
- inter-segment sales 378 162 419
Coke and Chemicals
- external sales 1 163 432 1 597
- inter-segment sales 24 27 56
Adjustments and eliminations (636) (317) (878)
Total revenue 16 165 11 960 25 598
Distributed as:
- Local 12 789 9 263 20 344
- Export
Africa 2 318 1 627 3 508
Europe 26 57 108
Asia 885 959 1 554
Other 147 54 84
All of the segment revenue reported
above is from external customers.
Segment profit/(loss) from operations
Six months ended Year ended
30 June 30 June 31 December
2010 2009 2009
Reviewed Reviewed Audited
Rm Rm Rm
Operating profit/(loss) before
depreciation, amortisation and
impairments
- Flat Carbon Steel Products 1 705 (99) 381
- Long Carbon Steel Products 846 111 591
- Coke and Chemicals 503 123 556
- Corporate and Other (17) 121 19
Depreciation and amortisation
- Flat Carbon Steel Products (548) (478) (995)
- Long Carbon Steel Products (134) (123) (250)
- Coke and Chemicals (22) (28) (107)
- Corporate and Other 16 51 60
Impairment charge
- Long Carbon Steel Products (25)
Profit/(loss) from operations
- Flat Carbon Steel Products 1 157 (577) (614)
- Long Carbon Steel Products 712 (12) 315
- Coke and Chemicals 481 95 449
- Corporate and Other (1) 172 79
Profit/(loss) from operations 2 349 (322) 229
Segment assets
Six months ended Year ended
30 June 30 June 31 December
2010 2009 2009
Reviewed Reviewed Audited
Rm Rm Rm
Flat Carbon Steel Products 19 782 18 845 18 430
Long Carbon Steel Products 5 015 4 870 4 530
Coke and Chemicals 936 1 093 887
Corporate and Other 8 495 5 171 6 937
Total 34 228 29 979 30 784
Group statement of changes in equity
Non-distributable reserves
Stated Trea- Capital Manage- Share- Attri-
capital sury redemp- ment based butable
reserve tion share Pay- reserves
reserve trust ment of
reserve equity-
accounted
invest-
ments
Rm Rm Rm Rm Rm Rm
Balance at 1 January 37 23 (207) 95 1 137
2009
Total comprehensive
income for the period
(net of income tax)
Management share (2)
trust: net treasury
share purchases
Share options charge: 17
IFRS 2
Dividend
Repurchases of shares (3 918)
Transfer of equity- 41
accounted earnings
Balance at 30 June 37 (3 918) 23 (209) 112 1 178
2009 (reviewed)
Total comprehensive
income for the period
(net of income tax)
Management share (10)
trust: net treasury
share purchases
Share options charge: 38
IFRS 2
Transfer of equity- 77
accounted earnings
Balance at 31 December 37 (3 918) 23 (219) 150 1 255
2009 (audited)
Total comprehensive
income for the period
(net of income tax)
Management share (8)
trust: net treasury
share purchases
Share options charge: 12
IFRS 2
Transfer of equity- 135
accounted earnings
Balance at 30 June 37 (3 918) 23 (227) 162 1 390
2010 (reviewed)
Group statement of changes in equity
Non-distributable reserves
Financial Trans- Cash Re- Total
assets lation flow tained share-
available of hedge income holders
for sale foreign account- equity
opera- ing
tions
Rm Rm Rm Rm Rm
Balance at 1 January 2009 (9) 584 (120) 26 455 27 995
Total comprehensive income (23) (318) 84 (848) (1 105)
for the period (net of
income tax)
Management share trust: (2)
net treasury share
purchases
Share options charge: 17
IFRS 2
Dividend (1 627) (1 627)
Repurchases of shares (3 918)
Transfer of equity- (41)
accounted earnings
Balance at 30 June 2009 (32) 266 (36) 23 939 21 360
(reviewed)
Total comprehensive income 194 (57) 30 370 537
for the period (net of
income tax)
Management share trust: (10)
net treasury share
purchases
Share options charge: 38
IFRS 2
Transfer of equity- (77)
accounted earnings
Balance at 31 December 162 209 (6) 24 232 21 925
2009 (audited)
Total comprehensive income 85* 63 6 1 777 1 931
for the period (net of
income tax)
Management share trust: (8)
net treasury share
purchases
Share options charge: 12
IFRS 2
Transfer of equity- (135)
accounted earnings
Balance at 30 June 2010 247** 272*** 25 874 23 860
(reviewed)
* R104 million relates to equity-accounted investments
**R229 million relates to equity-accounted investments
***R10 million relates to equity-accounted investments
Salient features
Six months ended Year ended
30 June 30 June 31 December
2010 2009 2009
Reviewed Reviewed Audited
Rm Rm Rm
Reconciliation of earnings before
interest, taxation, depreciation and
?amortisation (EBITDA)
Profit/(loss) from operations 2 349 (322) 229
Adjusted for:
- Impairment charge 26
- Depreciation 682 572 1 279
- Amortisation of intangible assets 6 6 13
EBITDA 3 037 256 1 547
Reconciliation of headline
earnings/(loss)
Profit/(loss) for the period
Adjusted for: 1 777 (848) (478)
- Loss on disposal or scrapping of 38 5 29
assets
- Impairment charge 26
- Impairment reversal (9)
- Tax effect (11) (1) (8)
Headline earnings/(loss) 1 804 (844) (440)
Headline earnings/(loss) per share
(cents)
- basic 450 (190) (104)
- diluted 449 (189) (104)
Selected ratios (%)
EBITDA margin 18.8 2.1 6.0
Return on ordinary shareholders`
equity per annum
- attributable earnings 15.5 (6.9) (1.9)
- headline earnings 15.8 (6.8) (1.8)
Net cash to equity 20.5 12.8 18.1
Share statistics
Ordinary shares (thousands)
- in issue 401 202 401 202 401 202
- weighted average number of shares 401 202 445 260 423 050
- diluted weighted average number of 401 701 445 675 423 684
shares
Share price (closing) (Rand) 75.89 95.50 103.00
Market capitalisation (Rm) 30 447 38 315 41 324
Net asset value per share (Rand) 59.47 53.24 54.65
Dividend per share (cents)
- interim 150
Unaudited supplementary physical information (`000 tonnes)
Six months ended Year ended
30 June 30 June 31 December
2010 2009 2009
Flat Carbon Steel Products
Liquid steel production 2 038 1 526 3 428
Sales 1 772 1 347 2 858
Long Carbon Steel Products
Liquid steel production 1 008 851 1 879
Sales 928 721 1 615
Total
Liquid steel production 3 046 2 377 5 307
Sales 2 700 2 068 4 473
- local 1 905 1 389 3 072
- export 795 679 1 401
Local sales as a percentage of total 71% 67% 69%
sales
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).
Directors: Non-executive: MJN Njeke* (Chairman), DK Chugh, CPD Cornier#, M
Macdonald*, S Maheshwari, LP Mondi, DCG Murray*, ND Orleyn*, AMHO Poupart-
Lafarge#
Executive: NMC Nyembezi-Heita (Chief Executive Officer),
HJ Verster (Chief Financial Officer)
Citizen of India #Citizen of France *Independent non-executive
Company Secretary: Premium Corporate Consulting Services (Pty) Limited
Registered office: ArcelorMittal South Africa Limited, Room N3-5,
Main Building, Delfos Boulevard, Vanderbijlpark, 1911
Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Johannesburg, 2001. PO Box 61051, Marshalltown, Johannesburg, 2107
Sponsor: Deutsche Securities (SA) (Pty) Limited, 87 Maude Street, Sandton, 2196,
Private Bag X9933, Sandton, 2146
This report is available on ArcelorMittal South Africa`s website at:
http://www.arcelormittal.com/southafrica/
Share queries: Please call ArcelorMittal South Africa share care toll free on
0800 006 960 or +27 11 370 7850
Vanderbijlpark
28 July 2010
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 28/07/2010 07:05:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
