ArcelorMittal S.Africa to cut more than 2,000 jobs, shares drop
(Adds more detail, shares, quotes)
JOHANNESBURG, July 10 (Reuters) - The South African arm of
steelmaker ArcelorMittal expects to plunge to a
first-half loss and cut more than 2,000 jobs as it struggles
with cheap imports, rising costs and a flagging local economy,
it warned on Wednesday.
Shares in the company, majority-owned by ArcelorMittal
, dropped more than 10% after it said previous
initiatives to reduce costs had proved insufficient and so it
was contemplating a "large-scale" restructuring.
"More significant measures have become necessary, including
the review of staffing levels, together with other
interventions," it said in a statement.
"It is anticipated that in excess of 2,000 positions (full
time equivalents) may be affected," it continued, adding the
final number was subject to formal consultation.
The company employed around 8,850 people in 2018, according
to its annual report for that year.
ArcelorMittal South Africa, which has for some time
complained about cheap imports eating into its business, said
ongoing challenges in the steel industry as well as a weak South
African economy had hit its performance.
These factors had been exacerbated by high costs for power,
rail and port use, as well as raw materials, it said.
The company said it expected headline results to fall by at
least 650 million rand ($45.78 million) in the first half of its
financial year, plunging it deep into a loss compared with
earnings of 54 million rand in the same period last year.
It said it would release a further trading statement once it
has more certainty on headline earnings per share, the main
profit measure in South Africa that strips out certain one-off
items, and loss per share.
At 0845 GMT, the company's shares were down 9.3% at 31.4
rand, off an earlier low of 28.7 rand.
It also said, however, that its overall first-half loss for
the period was expected to improve by at least 700 million rand,
resulting in an improvement in loss per share.
($1 = 14.1997 rand)
(Reporting by Emma Rumney, Editing by Louise Heavens and Mark
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