In a period characterised by depressed economic conditions and weak steel demand, ArcelorMittal SA has reported a headline loss of R518-million for the year ending December 31, 2012, the company announced on Wednesday.

This compared to a loss of R52mn in the prior year. Earnings before interest, taxes, depreciation, and amortisation (Ebitda) declined by 35 percent to R1.12-billion from R1.72bn in 2011 due to a modest drop in domestic steel dispatches and a substantial decline in commercial coke sales.

However, 2012 saw a significant improvement in cash flow, operational stability, and the best safety record to date with zero fatalities.

Revenue of R32.3bn was three percent higher than reported a year ago. Total steel shipments decreased two percent, with domestic shipments down five percent, offset by higher exports of seven percent.

ArcelorMittal SA chief executive Nonkululeko Nyembezi-Heita said: "As anticipated, 2012 was a very tough year with subdued economic activity and poor demand.

"At the same time, we are pleased with the strides we have made in achieving operational stability and containing costs.

"Safety is an area where we have seen significant improvement over the last year, as can be seen in our lost time injury frequency rate, which dropped to 0.61 from 1.24 a year earlier," she said.

Domestic steel demand continued to be weak, driven by sluggish demand from the building and construction sector, the largest steel consumer.

On a compounded basis, steel demand in South Africa had grown at an annual average rate of only 1.1 percent over a 20 year period.

Domestic steel sales declined by five percent as a result of weak demand and destocking in the second half of the year, while net realised prices in rand terms increased by seven percent.

Dollar prices of key raw materials, such as coking coal, pellets, and scrap were flat, while electricity costs increased by another 16 percent.

On page Two... Liquid steel production was down seven percent...