Provisional reviewed condensed consolidated financial statements for the year ended 31 December 2014

Transcription

1 Provisional reviewed condensed consolidated financial statements for the year ended This report is available on ArcelorMittal South Africa s website at: Share queries: Please call the ArcelorMittal South Africa share care toll free line on or

2 R1.8 billion investment in reline of blast furnace at Newcastle completed Net loss decreased to R158 million compared to R2 147 million in the prior year Focus on zero fatalities and injuries Overview Despite a strengthening economy in the United States, the demand for steel in China, the biggest consumer of steel, dropped for the first time in 14 years. This drop influenced the overall world demand for steel and aggravated the global excess capacity which led to stronger exports out of China, Europe and Japan. International prices for steel and commodities declined, and currency parities shifted. Export markets faced particularly unsatisfactory profit margins. Overall these developments accelerated the need for steel producers to reduce cost in order to stay competitive. Locally, the ongoing load shedding by Eskom, slow implementation of the large infrastructure development projects, the protracted mining and metals and engineering strikes put severe pressure on the steel industry. As noted, due to the worldwide excess capacity of steel, cheaper imports from China continued to enter the local market despite the devaluation of the rand. Provisional reviewed condensed consolidated financial statements for the year ended 1

3 Overview continued Our liquid steel production was 4.5 million tonnes, a decrease of tonnes compared to last year reflecting the effect of the planned blast furnace reline at Newcastle. The decrease in tonnes was partly countered by higher production volumes at Vanderbijlpark which was negatively impacted by the fire incident in the prior year. Although total sales volumes were on the same level as last year as billets were imported to ensure that our long steel customers demands were satisfied during the blast furnace reline at Newcastle, domestic sales decreased by 4% mainly due to the lower demand for steel, aggravated by the protracted strike in the mining sector in the first half of the year, followed by the metal and engineering strike. Our exports increased by 12% to counter our losses in the local market. Notwithstanding our quest to achieve zero fatalities and injuries, four fatal incidents occurred last year. We are focused on ensuring that we rapidly turn around our safety performance for our employees and the contractors who work for us. Headline loss was R227 million or 57 cents a share compared to a loss of 56 cents a share last year. EBITDA was R1 258 million, a decrease of R510 million compared to last year. The temporary suspension of production during the reline resulted in an EBITDA opportunity loss of approximately R1 200 million which included the cost of sourced in material to maintain despatches to the local market. Our higher overall operating costs were partially offset by higher local prices, following a weaker R/US dollar exchange rate. Overall, our net loss of R158 million is an improvement of R1 989 million when compared to the prior year net loss of R2 147 million driven primarily by the impairment of the Thabazimbi assets in. The company invested approximately R1 800 million to reline the blast furnace. This significant investment signals management s confidence in the future of the company. The net borrowing position of R546 million at the end of compared to a net cash position at the end of primarily reflects the effects of the capex spend for the reline. 2 Provisional reviewed condensed consolidated financial statements for the year ended

4 Key statistics Six months ended 30 June Year ended Audited Revenue (R million) Average net realisable price (R/t) (unaudited) EBITDA (R million) EBITDA/tonne (R/t) (unaudited) EBITDA margin (%) (143) (15) (2 007) Net loss (R million) (158) (2 147) (36) (4) (500) Loss per share (cents) (39) (535) (221) (6) (101) Headline loss (R million) (227) (224) (55) (2) (25) Headline loss per share (cents) (57) (56) (546) (594) 285 Net (borrowings)/cash (546) 285 information Liquid steel production ( 000 tonnes) Steel sales ( 000 tonnes) Local Export Commercial coke sales ( 000 tonnes) Capacity utilisation (%) Lost-time injury frequency rate Provisional reviewed condensed consolidated financial statements for the year ended 3

5 Market review International The global steel industry experienced strong volatility in. The year started on a good note as signs of improved economic growth were noted in the USA, while Europe was in the process of resolving its sovereign debt woes. In the USA, there was a setback in the first quarter due to tough weather conditions. Some of the steel plants experienced unplanned power outages, impacting negatively on cost due to various shutdowns and repairs. The economy picked up in the second quarter with consumer demand in durable goods showing tremendous growth. Steel demand from the automobile and construction sector kept the order books for steel in good shape. There were positive developments on trade actions filed by steel companies. The anti-dumping duty imposed on the import of all countries tubular goods into the USA was a big relief to the steel industry. However, the Chinese economy slowed down significantly. At large, the world markets seemed to accept this as a new trend for the Chinese economy. Towards the end of year, the cycle turned downwards for the global steel industry. There were increasing concerns about growth in China and Europe, with overall steel demand dropping. Despite these developments which were mainly in advanced countries, the landscape for the African market remained positive, with infrastructure development activities in the sub-saharan region being the key steel demand driver. Domestic The South African economy has been through a turbulent time in as evidenced by a contraction in the first quarter of. Although some improvements emerged later in the year, with improved PMI data, the prolonged strikes in the mining sector and disruptions that occurred in some key manufacturing segments, including the metals and engineering industry, hampered the recovery of economic growth. The growth patterns in the construction industry remained relatively weak and failed to stimulate higher and sustained steel demand. Despite a favourable currency environment, the uncompetitive manufacturing landscape and the overall high costs of doing business limited the export potential for domestic steel producers and end-user segments of the market. Several market segments were impacted by cheap steel imports, negatively affecting the sales of domestic producers. 4 Provisional reviewed condensed consolidated financial statements for the year ended

6 Financial review Year ended compared to year ended Revenue increased 8% to R34.9 billion following a 7% increase in average net realised prices. Domestic prices were 9% higher, while exports rose 5%. Prices for flat and long steel rose 6% and 10% respectively. Total steel shipments remained in line with the previous year with export shipments up 12%, while local shipments were down 4% in line with reduced local market activity. Flat steel shipments were up 8%, while long steel shipments dropped 14% as a result of the planned blast furnace reline in Newcastle. Revenue from the Coke and Chemicals business of R2.0 billion was 6% higher than the previous year. This was driven by better prices for both major by-products; prices for commercial coke and tar products increased by 9% and 13% respectively. Sales volumes for commercial coke dropped by 14%, while tar sales volumes remained flat. Cash costs per ton of liquid steel produced increased by 7% year-on-year. Raw materials, consisting of iron ore, coal and scrap, which together account for approximately 48% of costs, increased by 5%. Consumables and auxiliaries, which account for approximately 28% of costs, increased by 15%, while fixed costs per ton increased by 3% despite being impacted by a volume decrease of 11% on liquid steel produced. The new Kumba agreement had resulted in iron ore costs remaining constant in rand terms. Tshikondeni costs increased sharply as the mine neared its end of life, with production stopped at the end of quarter three. Liquid steel production was tonnes lower, of which long steel production was down 50%, while flat steel was up 11%. Capacity utilisation for flat steel improved from 74% to 85% due to the adverse effect of the blast oxygen furnace fire in. Long steel capacity utilisation decreased from 81% to 41% following the planned blast furnace reline in Newcastle in. A headline loss of R227 million was in line with the previous year s R224 million and included the following items: EBITDA was R1 258 million compared to R1 768 million in, mainly due to the impact of the reline of the blast furnace in Newcastle offset to an extent by the improvement at Vanderbijlpark; Once-off items for restructuring the cost base of R149 million, mainly relating to provisions for reducing administrative cost and for the ongoing closure of the mine in Tshikondeni. In the prior year, a provision of R158 million was raised relating to the closure costs of the Tshikondeni mine; Net financing costs of R588 million for the year compared to R260 million in the prior year. This was due to the increased borrowing following the reline and a change in discount rate for determining the present value of long-term liabilities; Share of profit from equity-accounted investments after taxation of R191 million compared with a loss of R35 million in. This relates to improved results from Macsteel International Holding BV and Coal of Africa; and A tax credit of R460 million compared to a prior year tax credit of R51 million primarily due to a credit of R360 million relating to energy efficiency initiatives undertaken in terms of section 12L of the South African Income Tax Act. Provisional reviewed condensed consolidated financial statements for the year ended 5

7 Financial review continued EBITDA: Half-year ended compared to half-year ended (unaudited) Revenue increased 2% to R16.9 billion following a 7% increase in average net realised prices. Domestic prices were 6% higher, while exports rose 7%. Prices for flat and long steel rose 5% and 13% respectively. Total steel shipments were down 3% with local shipments up 3%, while exports were down 16% following the reline of the Newcastle blast furnace during which period export shipments were curtailed. Shipments for flat products increased 5%, while exports decreased 2%. Revenue from the Coke and Chemicals business of R1 025 million was 8% lower following a 23% decrease in commercial coke sales volumes and a 9% increase in net realised prices. Tar sales volumes remained flat, while prices increased 9%. Cash costs per ton of liquid steel produced increased by 7% period-on-period. Raw materials, consisting of iron ore, coal and scrap, which together account for approximately 48% of costs, increased by 5%. Consumables and auxiliaries, which accounted for 28% of costs, increased by 17%, while fixed costs remained constant on a per ton basis despite being impacted by a volume decrease of 19% on liquid steel produced. Liquid steel production was tonnes or 18% lower, of which long steel production was down 71%, while flat steel was up 10%. Capacity utilisation for flat steel was higher at 88% against 80%, while long steel was at 23% against 80%. As a result of the above, EBITDA was down by R343 million to R448 million from R791 million. EBITDA: Half-year ended compared to half-year ended 30 June (unaudited) Revenue decreased 6% to R16.9 billion following a 7% decrease in steel shipments. Local shipments remained subdued and decreased 4%, while exports decreased 13%. Shipments for flat and long steel decreased 2% and 18% respectively. Overall steel prices rose 3%, with local and export prices rising 2% and 4% respectively. Flat steel prices rose 2% and long steel 6%. Revenue from the Coke and Chemicals business of R1 025 million remained flat following a 24% increase in commercial coke sales volumes and a 5% decrease in net realised prices. Tar sales volumes increased 8%, while prices decreased 1%. Cash costs per ton of liquid steel produced decreased by 2% period-on-period. Raw materials, consisting of iron ore, coal and scrap, which together account for approximately 48% of costs, decreased by 5%. Consumables and auxiliaries, which account for approximately 28% of costs, increased by 9%, while fixed costs per ton decreased by 8% despite being impacted by a volume decrease of 11% on liquid steel produced. Liquid steel production was tonnes or 11% lower, of which long steel production was down 60%, while flat steel was up 9%. Capacity utilisation for flat steel was higher at 88% against 83%, while long steel was at 23% against 58%. As a result of the above, EBITDA was down by R362 million to R448 million from R810 million. 6 Provisional reviewed condensed consolidated financial statements for the year ended

8 Environment (unaudited) Notwithstanding the tough economic conditions the company operates under, key environmental projects remain a focus area in order to ensure environmental compliance. The key project during was the Newcastle zero-effluent discharge project which entailed the improvement of effluent treatment. This project was completed in at a total cost of R430 million. Following a judgement by the Supreme Court of Appeal on 26 November, which ruled that the company must provide historical environmental information regarding its Vanderbijlpark and Vereeniging operations to the Vaal Environmental Justice Alliance (VEJA), the company decided not to challenge this matter further and the requested information was handed over to the VEJA on 17 December. The company seeks to pursue a path of open and transparent engagement with the VEJA and all other stakeholders for that matter. The proposed implementation of a carbon tax by the National Treasury remains a concern as the company s competitiveness may be affected particularly as imported steel does not have this in its cost base. Very limited opportunities exist to reduce carbon emissions in the iron and steel production process and no feasible low carbon alternatives exist at this stage to produce steel from iron ore. Therefore, the intention of the carbon tax to change behaviour is difficult to realise within the iron and steel industry. ArcelorMittal will actively participate in the Department of Environmental Affairs DERO (Desired Emission Reduction Outcomes) setting process during 2015, which will seek alignment with the proposed carbon tax. Contingent liabilities As reported in prior periods, and dating back to 2007, the Competition Commission (the Commission) has referred five cases against ArcelorMittal South Africa Limited (ArcelorMittal South Africa) to the Competition Tribunal for prosecution. ArcelorMittal South Africa rejects the allegations made in each of these cases and is accordingly defending itself. In addition, the Commission is formally investigating one further complaint against ArcelorMittal South Africa relating to alleged excessive pricing of tinplate and flat steel in general. Joined to this investigation is an investigation into alleged excessive pricing arising from the iron ore surcharge introduced by ArcelorMittal South Africa for the period May 2010 to July ArcelorMittal South Africa is cooperating fully with the Commission in this investigation and continues to deliver all information and documentation as and when called upon to do so. Provisional reviewed condensed consolidated financial statements for the year ended 7

9 Dividends No dividends were declared for the year ended. Changes to the board of directors Paul O Flaherty was appointed chief executive officer and executive director with effect from 1 July. Matthias Wellhausen has resigned as chief financial officer and executive director of the company with effect from 15 March Gerhard van Zyl has been appointed as acting chief financial officer with effect from 15 March Sudhir Maheshwari has resigned as non-executive director with effect from 31 March Outlook for the first half of 2015 (unaudited) We expect higher production and sales volumes following the completion of the reline of the blast furnace at Newcastle and the seasonal slowdown in the fourth quarter of. Although we expect International steel prices to remain low for the first half of the year, these factors, together with ArcelorMittal producing to full capacity and reducing costs, should contribute positively to the results. On behalf of the board of directors PS O Flaherty Chief executive officer MJ Wellhausen Chief financial officer 2 February Provisional reviewed condensed consolidated financial statements for the year ended

10 Independent auditor s review report on condensed consolidated financial statements TO THE SHAREHOLDERS OF ARCELORMITTAL SOUTH AFRICA LIMITED Introduction We have reviewed the condensed consolidated financial statements of ArcelorMittal South Africa Limited, contained in the accompanying provisional report, which comprise the condensed consolidated statement of financial position as at and the condensed consolidated statements of comprehensive income, changes in equity, and cash flows for the year then ended, and selected explanatory notes. Directors responsibility for the condensed consolidated financial statements The directors are responsible for the preparation and presentation of these condensed consolidated financial statements in accordance with the requirements of the JSE Limited Listings Requirements for provisional reports, as set out in note 1 to the financial statements, and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Listings Requirements require condensed consolidated financial statements contained in a provisional report to be prepared in accordance with the framework concepts, the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, contain the information required by International Accounting Standard (IAS) 34, Interim Financial Reporting. Auditor s responsibility Our responsibility is to express a conclusion on these financial statements. We conducted our review in accordance with the International Standard on Review Engagements (ISRE) 2410, which applies to a review of historical information performed by the independent auditor of the entity. ISRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the financial statements are not prepared in all material respects in accordance with the applicable financial reporting framework. This standard also requires us to comply with relevant ethical requirements. Provisional reviewed condensed consolidated financial statements for the year ended 9

11 Independent auditor s review report on condensed consolidated financial statements continued A review of financial statements in accordance with ISRE 2410 is a limited assurance engagement. We perform procedures, primarily consisting of making inquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluate the evidence obtained. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on these financial statements. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements of ArcelorMittal South Africa Limited for the year ended are not prepared, in all material respects, in accordance with the requirements of the JSE Limited Listings Requirements for provisional reports, as set out in note 1 to the financial statements, and the requirements of the Companies Act of South Africa. Deloitte & Touche Registered Auditor Per: DA Steyn Partner 9 February 2015 Buildings 1 and 2, Deloitte Place, The Woodlands, Woodlands Drive, Woodmead, Sandton, South Africa National Executive: LL Bam (Chief Executive)*, AE Swiegers (Chief Operating Officer)*, GM Pinnock (Audit)*, DL Kennedy (Risk Advisory), NB Kader (Tax)*, TP Pillay (Consulting), K Black (Clients & Industries)*, JK Mazzocco (Talent and Transformation)*, MJ Jarvis (Finance)*, M Jordan (Strategy)*, S Gwala (Managed Services), TJ Brown (Chairman of the Board)*, MJ Comber (Deputy Chairman of the Board)*. A full list of partners and directors is available on request. *Partner and registered auditor B-BBEE rating: Level 2 contributor in terms of the Chartered Accountancy Profession Sector Code. Member of Deloitte Touche Tohmatsu Limited 10 Provisional reviewed condensed consolidated financial statements for the year ended

12 Condensed consolidated statement of comprehensive income Six months ended 30 June In millions of rands Year ended Audited Revenue (10 567) (10 772) (10 145) Raw materials and consumables used (21 339) (19 652) (1 891) (1 873) (1 714) Employee costs (3 764) (3 408) (1 805) (1 661) (1 694) Energy (3 466) (3 288) Movement in inventories of finished goods and work in progress (63) 526 (747) (639) (808) Depreciation (1 386) (1 544) (12) (12) (11) Amortisation of intangible assets (24) (19) (2 718) (2 748) (2 871) Other operating expenses (5 466) (5 659) (460) 159 (186) (Loss)/profit from operations (301) 47 (1 950) Impairment charges (1 950) (28) Finance and investment income (353) (252) (156) Finance costs (605) (368) 80 Gain recognised on loss of interest over former associate 80 Income/(loss) from equity-accounted investments (net of tax) 191 (35) (672) 54 (2 087) (Loss)/profit before tax (618) (2 198) 529 (69) 80 Income tax credit/(expense) (143) (15) (2 007) Loss for the period (158) (2 147) Other comprehensive income/(loss) Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations (26) (3) (14) Losses on available-for-sale investments taken to equity (29) (9) Share of other comprehensive (loss)/income of equity-accounted investments (253) 28 (247) (6) (35) (14) 19 (1 774) Total comprehensive (loss)/income for the period 5 (1 567) Loss attributable to: (143) (15) (2 007) Owners of the company (158) (2 147) Total comprehensive (loss)/income attributable to: (14) 19 (1 774) Owners of the company 5 (1 567) Attributable loss per share (cents) (36) (4) (500) basic (39) (535) (36) (4) (500) diluted (39) (535) Provisional reviewed condensed consolidated financial statements for the year ended 11

13 Condensed consolidated statement of financial position 12 Provisional reviewed condensed consolidated financial statements for the year ended As at 30 June Audited In millions of rands Assets Non-current assets Property, plant and equipment Intangible assets Equity-accounted investments Other financial assets Current assets Inventories Trade and other receivables Taxation Other financial assets Cash and bank balances Total assets Equity and liabilities Shareholders equity Stated capital Non-distributable reserves (1 294) (1 521) (1 614) Retained income Non-current liabilities Other payables Finance lease obligations Deferred income tax liability Non-current provisions Current liabilities Trade payables Borrowings Bank overdraft 107 Finance lease obligations Taxation Current provisions Other payables Other financial liabilities 11 1 Total equity and liabilities

14 Condensed consolidated statement of cash flows Six months ended 30 June In millions of rands Year ended Audited (101) 56 Cash inflows/(outflows) from operating activities Cash generated from operations Interest income 12 7 (211) (161) (106) Finance cost (372) (169) (53) (31) (73) Income tax paid (84) (221) 8 (25) (78) Realised foreign exchange movement (17) (128) (1 793) (815) (908) Cash outflows from investing activities (2 608) (1 545) (1 794) (846) (926) Investment to maintain operations (2 640) (1 500) (53) (20) (41) Investment to expand operations (73) (69) 42 (5) (15) Decrease/(increase) in equity-accounted investment 37 (53) 1 71 Proceeds from disposal of assets Investment income interest Dividend from equity-accounted investments 61 (14) Cash (outflows)/inflows from financing activities (14) (Decrease)/increase in borrowings and finance lease obligations (825) 71 Increase/(decrease) in cash and cash equivalents (787) Effect of foreign exchange rate changes Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Provisional reviewed condensed consolidated financial statements for the year ended 13

15 Notes to the reviewed condensed group financial results 1. Basis of preparation The reviewed condensed consolidated financial statements are prepared in accordance with the requirements of the JSE Limited Listings Requirements for provisional reports and the requirements of the Companies Act of South Africa. The Listings Requirements require provisional reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of these condensed consolidated financial statements are in terms of IFRS and are consistent with those applied in the previous consolidated annual financial statements. The reviewed condensed consolidated financial statements were prepared under the supervision of Mr MJ Wellhausen, the group s chief financial officer. 2. Significant accounting policies These reviewed condensed consolidated financial statements for the year ended have been prepared on the historical cost basis, except for the revaluation of financial instruments. The accounting policies and methods of computation applied in the presentation of the financial results of the group are consistent with those applied for the year ended, except for the following new or revised standards, amendments thereto and interpretations as issued by the International Accounting Standards Board, which are effective for the current reporting period that were adopted: IFRIC 21 Levies IAS 36 Impairment of assets The adoption of these new and revised accounting standards did not have a material impact on the consolidated financial statements and as such there is no change to comparative information resulting from the adoption of these standards. 3. Change in accounting estimates The useful lives of certain items of property, plant and equipment were reassessed and revised to reflect the current estimated life over which the group has the ability and intention to use such assets. The effect of these changes on the actual depreciation expense for the year ended is a reduction of approximately R109 million, of which R53 million relates to the first six months ended 30 June. In addition, the company revised the method of estimation of net realisable value relating to general spare parts from that based on age to that based on the actual observed condition of the spares. This change resulted in the reversal of the previous write-down of inventory of R120 million. 14 Provisional reviewed condensed consolidated financial statements for the year ended

16 Notes to the reviewed condensed group financial results continued 4. Independent review by the auditors Any reference to future financial performance and expectations included in this announcement has not been reviewed or reported on by the company s auditors. 5. Capital expenditure commitments Six months ended Year ended 30 June Audited In millions of rands Audited Contracted Authorised but not contracted Related party transactions The group is controlled by ArcelorMittal Holdings AG which effectively owns 52.02% of the company s shares. During the year the company and its subsidiaries, in the ordinary course of business, entered into various sale and purchase transactions with associates and joint ventures. These transactions occurred under terms that are no less favourable than those arranged with third parties. 7. Corporate governance (unaudited) The group subscribes to and substantially complies with the King Code on Corporate Governance for South Africa. Provisional reviewed condensed consolidated financial statements for the year ended 15

17 Notes to the reviewed condensed group financial results continued 8. Fair value measurements Some of the group s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined, particularly the valuation techniques and inputs used. Financial assets/liabilities Fair values as at period ended In millions of rands 30 June Audited Fair value hierarchy Valuation techniques and key inputs Available for sale Level 1 Quoted prices in an active market Held-for-trading assets Level 1 Quoted prices in an active market Held-for-trading liabilities 11 1 Level 1 Quoted prices in an active market Level 1: Fair value measurements are those derived from unadjusted quoted prices in active markets for identical assets or liabilities. 9. Subsequent events The directors are not aware of any matter or circumstances arising since the end of December to the date of this report that would significantly affect the operations, the results and the financial position of the group. 16 Provisional reviewed condensed consolidated financial statements for the year ended

18 Condensed consolidated statement of changes in equity In millions of rands Stated capital Treasury share equity reserve Other reserves Retained earnings Six months ended 30 June () Balance as at 1 January 37 (3 918) Total comprehensive loss 347 (140) 207 Share-based payment reserve 9 9 Transfer of equity-accounted earnings (148) 148 Balance as at 30 June () 37 (3 918) Six months ended (Audited) Balance as at 30 June 37 (3 918) Total comprehensive income/(loss) 233 (2 007) (1 774) Share-based payment reserve Transfer of equity-accounted earnings 113 (113) Balance as at (Audited) 37 (3 918) Six months ended 30 June () Balance as at 37 (3 918) Total comprehensive income/(loss) 34 (15) 19 Share-based payment reserve Transfer of equity-accounted earnings 49 (49) Balance as at 30 June () 37 (3 918) Six months ended () Balance as at 30 June 37 (3 918) Total comprehensive income/(loss) 129 (143) (14) Share-based payment reserve Transfer of equity-accounted earnings 85 (85) Balance as at () 37 (3 918) Total Provisional reviewed condensed consolidated financial statements for the year ended 17

19 Segment information Flat steel products Six months ended 30 June Year ended Audited Revenue (R million) External Internal EBITDA (R million) (554) (510) (657) Depreciation and amortisation (R million) (1 064) (1 255) (203) (326) (497) Loss from operations (R million) (529) (1 120) information Liquid steel production ( 000 tonnes) Steel sales ( 000 tonnes) Local Export Capacity utilisation (%) Provisional reviewed condensed consolidated financial statements for the year ended

20 Segment information continued Long steel products Six months ended 30 June Year ended Audited Revenue (R million) External Internal (162) EBITDA (R million) (205) (137) (159) Depreciation and amortisation (R million) (342) (301) (367) (Loss)/profit from operations (R million) (326) 897 information Liquid steel production ( 000 tonnes) Steel sales ( 000 tonnes) Local Export Capacity utilisation (%) Provisional reviewed condensed consolidated financial statements for the year ended 19

21 Segment information continued Coke and chemicals Six months ended 30 June Year ended Audited Revenue (R million) External Internal EBITDA (R million) (18) (17) (18) Depreciation and amortisation (R million) (35) (35) Profit from operations (R million) information Commercial coke produced ( 000 tonnes) Commercial coke sales ( 000 tonnes) Tar sales ( 000 tonnes) Corporate and other Six months ended 30 June Year ended Audited (120) EBITDA (R million) 279 (79) (50) (158) Tshikondeni mine closure costs (50) (158) (90) Restructuring cost (90) (9) Onerous contract Sandton office (9) Depreciation and amortisation credit (R million) (95) 256 (263) (Loss)/profit from operations (R million) 161 (209) 20 Provisional reviewed condensed consolidated financial statements for the year ended

22 Additional information Six months ended 30 June In millions of rands Year ended Audited Reconciliation of earnings before interest, taxation, depreciation and amortisation (EBITDA) Depreciation Amortisation of intangible assets Tshikondeni mine closure costs Restructuring cost 90 9 Onerous contract 9 (460) 159 (186) (Loss)/profit from operations Adjusted for: (301) EBITDA for the period Reconciliation of headline (loss)/earnings (143) (15) (2 007) Loss for the period (158) (2 147) Adjusted for: Gain recognised on loss of interest over former (80) associate (80) Impairment charges (61) Loss/(profit) on disposal or scrapping of assets 29 (37) (16) Profit on disposal of assets of an associate (16) 2 (4) 17 Tax effect (2) 10 (221) (6) (101) Headline loss for the period (227) (224) Headline loss per share (cents) (55) (55) (2) (2) (25) (25) basic diluted (57) (57) (56) (56) Return on ordinary shareholders equity per annum (1.4) (0.1) (19.4) Attributable earnings (%) (0.8) (10.0) (2.1) (0.1) (1.0) Headline earnings (%) (1.1) (1.0) (2.6) (2.9) 1.4 Net (borrowings)/cash to equity (%) (2.6) 1.4 Share statistics Ordinary shares (thousands) in issue weighted average number of shares diluted weighted average number of shares Share price (closing) (Rand) Market capitalisation (R million) Net asset value per share (Rand) Provisional reviewed condensed consolidated financial statements for the year ended 21

23 Other information ArcelorMittal South Africa Limited Registration number: 1989/002164/06 Share code: ACL ISIN: ZAE ( ArcelorMittal South Africa, the company or the group ) Registered office: ArcelorMittal South Africa Limited, Room N3-5, Main Building, Delfos Boulevard, Vanderbijlpark, 1911 Directors: Non-executive: PM Makwana* (Chairman), DK Chugh, FA du Plessis*, S Maheshwari, NP Mnxasana*, J Modise*, LP Mondi, DCG Murray*, G Urquijoº Citizen of India ºCitizen of Spain *Independent non-executive Executive: PS O Flaherty (Chief executive officer), MJ Wellhausen# (Chief financial officer) #Citizen of Germany Company secretary: Premium Corporate Consulting Services Proprietary Limited Sponsor: J.P. Morgan Equities South Africa Proprietary Limited, 1 Fricker Road, Illovo, 2196, Private Bag X9936, Sandton, 2146 Transfer secretaries: Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001, PO Box 61051, Marshalltown, 2107 Release date: 13 February 2015 Forward-looking statements Statements in this release that are neither reported financial results nor other historical information, are forward-looking statements, including but not limited to statements that are predictions of or indicate future earnings, savings, synergies, events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to risks and uncertainties whose impact could cause actual results and company s plans and objectives to differ materially from those expressed or implied in the forward-looking statements (or from past results). Any reference to future financial performance included in this announcement has not been reviewed or reported on by the company s auditors. 22 Provisional reviewed condensed consolidated financial statements for the year ended

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