JOHANNESBURG – Steelmaker ArcelorMittal South Africa expects first-half headline losses to increase by over 200% because of higher costs, the company said on Thursday.
The company, majority-owned by ArcelorMittal, forecast a headline loss per share in a range of 143 and 152 cents for the six months ended 30 June 2017, up from a loss of 45 cents per share in the same period last year.
Its share price fell over 5% on the announcement.
The company said margins remained constrained despite higher steel prices.
“Higher steel prices did not fully compensate for the higher raw material costs, namely coal and iron ore,” the company said, adding that operational incidents, impairments and the strengthening of the rand against the US dollar also hit its bottom line.
“In order to address these challenges the company is in the process of exploring several initiatives, including additional cost cutting interventions, assessing the profitability of various product lines and the implementation of structural changes in the next six months,” ArcelorMittal said.