JOHANNESBURG (Reuters) - ArcelorMittal’s South Africa unit (ACLJ.J) swung back to a modest profit in the first half of the financial year, boosted by higher steel prices and upbeat sale volumes, the firm said on Wednesday.
Diluted headline earnings per share (HEPS) for the six months ended 30 June, 2018, is 5 cents per share compared with a loss of 148 cents per share a year ago. This was in line with the company’s expectations for the first half of 2018.
HEPS is the main profit measure in South Africa that strips out certain once-off items.
The company, majority-owned by ArcelorMittal (MT.AS), said profits improved despite a constrained South African economy and a relatively strong average rand/U.S. dollar exchange rate in the first half of the year.
“The turnaround is on the back of a favorable international steel pricing environment together with higher steel sales volumes,” the company said in a statement.
ArcelorMittal’s South African unit said it was investigating further initiatives to address the group’s sustainability including the sale of its 50 percent stake in trading and shipping company MIHBV.
ArcelorMittal’s unit said in May said it would sell its stake in MIHBV for $220 million, which would be used to strengthen its balance sheet, fund working capital and for investments in the operating businesses.
The steelmaker, which has long complained about cheap imports eating into its business, said it had seen steel imports decrease during the period despite 392,000 tonnes of primary carbon steel imports into South Africa in the first half of the year.
South Africa said last year it would impose emergency “safeguard” tariffs on imports of certain flat hot-rolled steel products.
The tariff is to stay in place for three years and fall from 12 percent in the first year to 10 percent in the second year and 8 percent in the third.
Reporting by Tanisha Heiberg, Editing by Sherry Jacob-Phillips and Muralikumar Anantharaman