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ArcelorMittal South Africa (AMSA) is showing significant growth and stability. In fact, during a press briefing on 10 February 2022, the steel giant stated that the fiscal year ended 31 December 2021 was its best in 15 years.
At the time, AMSA CEO Kobus Verster explained, “A continuing strong price environment, higher sales volumes, the continued strategic repositioning of the company as well as the benefit of robust price-cost effects all contributed to an exceptionally profitable year for ArcelorMittal South Africa.”
Looking at AMSA’s annual results for the fiscal year ended 31 December 2021, Verster noted that, despite the volatility caused by Covid-19 and its variants, AMSA had recorded its highest annual EBITDA (R8.569 billion) and headline earnings of R6.86 billion since 2008.
Acting Chief Financial Officer (CFO), Suretha van Wyk added that operating profit increased substantially from a loss of R963 million in 2020 to a profit now of over R7.9 billion.
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Following this announcement, Newcastillians voiced their opinions, querying why employees were on short time, and overtime was cut if the company was running at a profit?
As numerous enquiries poured in, requesting a better understanding of the matter, the Newcastillian – Online News approached AMSA for guidance.
AMSA’s Group Manager of Stakeholder Management and Communications, Tami Didiza, explains that the good performance in 2021 was due to numerous factors, including the rise in international prices for steel, along with a lot of hard work towards achieving better performance efficiency and effectiveness for the business.
“Employees will benefit through incentive schemes that are in place, but more importantly, through the foundation which has been created for a sustainable business into the future – allowing for improved prospects for job preservation and continued investment into our communities.”
However, he adds that despite the 2021 performance, the steel industry is cyclical in nature, and its challenges are not entirely behind AMSA just yet.
Reaching out to the community in an attempt to assure Newcastillians, Didiza emphasises, “We need to remain focused on delivering on our recently announced and very ambitious Value Plan, which is aimed at further improving our international cost competitiveness and increasing our customer-centricity, as well as the targets we have set for ourselves for 2022 and beyond. These actions are necessary to secure our future as a sustainable organisation.”
Adding to this, he points out that AMSA’s six-month outlook, published on 10 February 2022, indicated that international steel prices are off the highs of 2021, although prices continue to receive support from robust raw material prices.
“Overall, this view is conditional upon central banks’ responses to rising inflation, the extent to which growth slows in China and the progress with vaccination coverage, especially in developing countries. Furthermore, recent geopolitical developments current playing out in Europe, are also likely to have an impact, though the situation is too volatile and uncertain at present to estimate to what extent.”
Didiza states that the company is targeting improved production reliability and greater customer focus into 2022. He notes that volume recovery will depend on the rail service’s reliability, which remains exceptionally fragile at the moment.
Armed with insight into the reality of AMSA, what are your thoughts?
Share your views in the comment section below.
Ja, they showing a profit as they didn’t pay increases last year, and we continually on short time….it’s not the top management that offered up, it’s the workers…they pulling the wool over everybody’s eyes by saying they made such a huge profit…I just would like to know, when is ArcelorMittal going to normalize again, we want our original pays with overtime, our husband’s work overtime yet they don’t get it, we don’t get our bonusses, and when we do it’s 3 months later….wanna know y? To earn interest ON OUR MONEY!!! legally that interest should be paid to the workers, not hogged by the investors….same with our increases, April is our increase month yet we only get our increases 3 or 4 months later, if top management want to do that, fine by us, but we will then demand that the interest gets paid over to the workers as well.
They think the workers are uneducated and idiots, they not. They know what top management is doing.
So try your stunts with with holding our bonuses and increases, we will just demand that the interest be paid over as well. Fair is fair