ArcelorMittal South Africa, the largest steel company in Africa, has said in a SENS announcement to shareholders said that it had finalised job cuts affecting more than 1 000 employees as it attempted to cut costs. The company had previously announced the large-scale employee reorganisation in July 2019.

In a statement released by the multinational steel manufacturing corporation, which has been operating in South Africa since 1989, ArcelorMittal said it had experienced a challenging year and an intense focus was placed on cash preservation.

“A large-scale employee reorganisation, as previously announced, has been largely finalised and resulted in a reduction of over a thousand own employees. Additionally, a significant repricing and rescoping of sub-contractor services will be completed by the end of the first quarter of 2020,” it said.

The restructuring is in line with the company’s long-term sustainability programme, it said. The earliest plan on the agenda was the closing down of Saldanha Steel Works. The process is expected to be completed by the end of the first quarter of 2020.

The second phase of the Asset Review commenced in November 2019, focusing on Newcastle Works and certain of the long steel products rolling facilities in Pretoria and Vereeniging. The objective of this phase of the review is to sustainably improve these operations’ structural cost position and service offering. The closure of significant long steel product plants is not anticipated in the foreseeable future, and notably, primary steel making operations will continue at Newcastle Works, although now focused on primarily serving the domestic and Africa Overland markets.

Shareholders were further cautioned to expect headline earnings for the year ended December 2019 to drop by at least R4.3 billion (headline earnings for 2018 was R968 million) to a headline loss and headline earnings per share to decrease by at least R3.93.

Attributable profit for the period is expected to decrease by at least R6.1 billion (profit for 2018 was R1 370 million), resulting in an increase in loss per share of at least R5.58.

A further trading statement will be released as soon as the company has reasonable certainty on the expected headline earning per share and attributable loss per share ranges for the period as required by the listings requirements.