ArcelorMittal sees bigger loss on weak steel demand

ArcelorMittal South Africa said half-year losses may widen as much as 15-fold as financing costs increased and demand growth slows.

The headline loss per share, which includes one-time items, will widen to a range of 25 cents to 30 cents for the six months ended June 30, from 2 cents a year earlier, the company said in a statement Thursday.

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The stock dropped as much as 6% to 14.50 rand and traded 2.7% lower at 15 rand by 9:18 a.m. in Johannesburg

“This is mainly due to a decline in net operating profit due to trading conditions and an increase in finance costs due to additional borrowings required,” it said.

AMSA, as the company is known, has reported annual losses since 2010, and last year asked the government for tariffs on Chinese imports as increases in operating costs exceeded inflation. Steel prices have slumped globally this year as China, the biggest producer, shipped excess output overseas as domestic demand slowed.

AMSA Chief Executive Officer Paul O’Flaherty will provide details “on the way forward” for the company Thursday, the producer said in an e-mail Wednesday.

- Bloomberg