Overview

The group's results were positively impacted by the higher realised steel prices on the back of higher international steel prices and higher steel sale volumes in spite of a weakening South African economy and relative strong average rand/US dollar exchange rate. Greater political stability and Moody's decision to maintain an investment-grade credit rating was positive for business confidence in South Africa. Low inflation and higher real wages should support stronger household spending, while the government's new drive to attract investment should help bolster capital outlays.

The domestic steel market in which the group operates remains constrained following minimal local investment and infrastructure spending and the volatility of the rand/US dollar exchange rate, while international demand remains strong. Local apparent steel consumption decreased by 3% as a result of subdued economic growth.

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Salient features
  • Ebitda improved by R2 121 million from a loss of R534 million to a profit of R1 587 million
  • Liquid steel production increased by 8%
  • Steel sale volumes up by 10% despite apparent steel consumption at a nine-year low
  • The disposal of the investment in Macsteel International Holdings BV (MIHBV) progressing well

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