Our opinion on the current state of ARCMITTAL(ACL)
ArcelorMittal (ACL) is South Africa's largest steel producer and has managed to survive in an industry where competitors like Highveld Steel have disappeared. The company was severely impacted by the sub-prime crisis, with its share price falling from a high of R260 in June 2008 to as low as 25 cents in August 2020. Since then, it has staged a strong recovery, reaching 1,052 cents before recent challenges reversed its upward momentum.
The company has had to navigate multiple challenges, including the collapse of the local construction industry, once a major consumer of steel, and the influx of cheap Chinese steel being dumped onto the South African market. While imports have slowed, ArcelorMittal successfully secured tariffs to discourage further dumping. At its lowest point in July 2020, the company appeared close to closure, but it was rescued by a rising steel price and severe cost-cutting measures.
In its results for the six months to 30th June 2024, the company reported a 3% decline in revenue and a headline loss of 100 cents per share, compared to a loss of 40 cents in the previous period. The company cited "difficult local and regional trading conditions, and the negative volume and direct cost impact of operational interruptions of the two blast furnaces at Vanderbijlpark" as major factors affecting financial performance.
In an update on 3rd July 2024, ArcelorMittal reported that the Longs steel product operations ("Longs Business") had remained operationally stable in the first half of 2024. However, the Flats steel product operations ("Flats Business") in Vanderbijlpark had suffered from significant instability at its blast furnaces in April and May 2024. The company emphasized that "intensive cash management actions" had kept net borrowings within tolerable levels.
In its third-quarter update for 2024, the company reported an EBITDA loss of R466 million, compared to a profit of R52 million in Q3 2023. This loss was primarily driven by the Longs Business. In a trading statement for the full year ending 31st December 2024, ArcelorMittal estimated a headline loss of between 450 cents and 466 cents per share, significantly worse than the previous period's loss of 170 cents. These results abruptly ended the company's new upward trend, sending the share price back down towards support at around 100 cents.
On 6th January 2025, ArcelorMittal announced its decision to wind down and close its Longs steel division, leading to a sharp drop in the share price. This move signals further financial strain and restructuring efforts as the company attempts to stabilize its operations.
While ArcelorMittal has previously recovered from extreme lows, the recent setbacks highlight its vulnerability to steel prices, operational challenges, and weak local demand. The stock remains highly volatile and should be approached with caution until clearer signs of stability and profitability emerge.
The company has had to navigate multiple challenges, including the collapse of the local construction industry, once a major consumer of steel, and the influx of cheap Chinese steel being dumped onto the South African market. While imports have slowed, ArcelorMittal successfully secured tariffs to discourage further dumping. At its lowest point in July 2020, the company appeared close to closure, but it was rescued by a rising steel price and severe cost-cutting measures.
In its results for the six months to 30th June 2024, the company reported a 3% decline in revenue and a headline loss of 100 cents per share, compared to a loss of 40 cents in the previous period. The company cited "difficult local and regional trading conditions, and the negative volume and direct cost impact of operational interruptions of the two blast furnaces at Vanderbijlpark" as major factors affecting financial performance.
In an update on 3rd July 2024, ArcelorMittal reported that the Longs steel product operations ("Longs Business") had remained operationally stable in the first half of 2024. However, the Flats steel product operations ("Flats Business") in Vanderbijlpark had suffered from significant instability at its blast furnaces in April and May 2024. The company emphasized that "intensive cash management actions" had kept net borrowings within tolerable levels.
In its third-quarter update for 2024, the company reported an EBITDA loss of R466 million, compared to a profit of R52 million in Q3 2023. This loss was primarily driven by the Longs Business. In a trading statement for the full year ending 31st December 2024, ArcelorMittal estimated a headline loss of between 450 cents and 466 cents per share, significantly worse than the previous period's loss of 170 cents. These results abruptly ended the company's new upward trend, sending the share price back down towards support at around 100 cents.
On 6th January 2025, ArcelorMittal announced its decision to wind down and close its Longs steel division, leading to a sharp drop in the share price. This move signals further financial strain and restructuring efforts as the company attempts to stabilize its operations.
While ArcelorMittal has previously recovered from extreme lows, the recent setbacks highlight its vulnerability to steel prices, operational challenges, and weak local demand. The stock remains highly volatile and should be approached with caution until clearer signs of stability and profitability emerge.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.