Steel producer ArcelorMittal South Africa has posted a quarterly profit, announcing headline earnings of R199 million for the September quarter compared with a R168 million headline loss a year earlier.
Revenue was up 15 percent to R8.8 billion as a result of an 11 percent rise in average steel prices. Domestic prices increased by 12 percent while exports rose 13 percent.
CEO Nonkululeko Nyembezi-Heita said in a statement: "Within the context of still fairly weak domestic trading conditions, our financial performance was encouraging. I'm pleased with the stability in our operations this past quarter, during which we've also been able to operate at relatively high levels of capacity utilisation, which were above 80 percent across all the units".
On Tuesday, the group announced it had ended a three-year pricing dispute with raw materials supplier Kumba Iron Ore.
"This is a very positive development for ArcelorMittal South Africa and Kumba," Nyembezi-Heita added. "The scope of the new agreement is broad, incorporating iron ore supply from both Sishen and Thabazimbi. The importance of the new arrangment for us is that it resolves all ongoing disputes with Kumba, results in more favourable prices than we currently enjoy and provides long-term security of supply for a key raw material input."
The new agreement – which will see ArcelorMittal buy up to 6.25 million tonnes of iron ore annually from Kumba at costs plus 20 percent – will come into effect at the beginning of January 2014.
For more info visit http://www.arcelormittalsa.com/Portals/0/AMSA%20Press%20Release%20Q3%202013%20.pdf.
Image: © ArcelorMittal
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