JOHANNESBURG, July 30 (Reuters) - Steel producer
ArcelorMittal South Africa Ltd fell deeper into a
half-year loss as demand for steel dropped due to the new
coronavirus and output declined after operations were shut
during a lockdown, the company said on Thursday.
Africa's biggest steel producer, which is majority-owned by
ArcelorMittal SA, said its headline loss had increased
to 2.613 billion rand ($157 million) for the six months to June
30 from a loss of 638 million rand a year earlier.
ArcelorMittal South Africa said some parts of its business
would remain idle until demand recovered, including placing the
melting operations at its Vereeniging Works on care and
maintenance from the third quarter.
The company said it expected steel demand to be at between
70% to 75% of pre-lockdown levels for the foreseeable future.
"On the back of a demanding 2019, the first half of 2020
proved to be incredibly difficult with the widespread health,
social and business impact brought about by the global COVID-19
pandemic," ArcelorMittal South Africa Chief Executive Kobus
The steel producer, which has long battled against cheap
imports, rising costs and a flagging local economy, said last
month it had begun talks to cut an unspecified number of jobs as
it slashes costs to deal with the impact of the pandemic.
Job cuts are politically sensitive in a country where
unemployment stands at a record high of about 30%.
During the period, liquid steel production fell 54% to 1.1
million tonnes and sales volumes dropped 47% to 1.1 million
The companys earnings before interest, taxes, depreciation,
and amortisation (EBITDA) fell from a profit of 167 million rand
to a loss of 1.256 billion rand.
($1 = 16.6841 rand)
(Reporting by Tanisha Heiberg; Editing by Edmund Blair)