Table of Contents
Key Points
- Steel sales volume dropped 11 percent while prices slid 7 percent, causing a 16.5% revenue decline to R17.12 billion ($947.72 million) in H1 2025.
- The IDC’s R1.08 billion ($59.58 million) injection eased losses, yet Longs Business wind-down remains set for 30 September 2025.
- ArcelorMittal’s equity plunged 47%, with retained earnings turning negative amid rising debt, weak demand, and market oversupply.
ArcelorMittal South Africa (ArcelorMittal SA), the Gauteng-based steelmaker linked to South African businesswoman Noluthando Gosa, reported a net loss of R932 million ($52 million) for the first half of 2025, as the group battled persistent industry headwinds, sliding steel prices, and weak domestic demand.
The loss, which amounted to R932 million ($51.66 million), compared to R1.21 billion ($67.29 million) in the previous period, reflects the ongoing pressure on both international and local steel markets. Steel sales volumes dropped 11 percent to 1.05 million tonnes, while average realized prices fell 7 percent, exacerbating revenue decline by 16.5 percent to R17.12 billion ($947.72 million).
Margins shrink as volumes drop and prices tumble
Operational gains failed to counterbalance deteriorating market conditions. Crude steel production rose 5 percent to 1.28 million tonnes, driven by improved asset utilization in the Flats Business. Yet, the company posted a headline loss of R1.01 billion ($55.66 million). Raw material basket costs declined 12 percent year-on-year, while fixed costs fell 5 percent to R3.25 billion ($179.07 million).
The company’s Value Plan contributed R420 million ($23.14 million), slightly down from R434 million ($23.91 million) a year earlier. A R1.08 billion ($59.58 million) funding injection from the Industrial Development Corporation (IDC) helped offset losses from the unprofitable Longs Business. However, without a long-term solution, the final wind-down of the division remains scheduled for 30 September 2025.
Crisis response
Net borrowings rose 21.8 percent to R4.62 billion ($254.58 million), highlighting pressure on liquidity and working capital. Deferred income of R842 million ($46.4 million) from IDC support remains pending due diligence.
Non-steel operations posted a modest R63 million ($3.47 million) EBITDA, but steel operations recorded a deeper R429 million ($23.65 million) loss. Management says IDC funds were used “responsibly and transparently” to protect jobs and value chains.
With the Longs Business shutdown set for 30 September, the months ahead are critical for restructuring under Gosa-linked leadership.
Demand collapse and global market pressures
Despite the guidance of seasoned business leaders like Noluthando Gosa—who holds a 6.15 percent stake and serves as a non-executive director—ArcelorMittal South Africa continues to struggle under the weight of severe industry headwinds. The steelmaker faces mounting pressure from weak global steel prices, persistent overcapacity, and intensifying competition from Chinese imports and scrap-fed mini-mills.
Yet the financial toll remains severe. While total assets rose 8.38 percent to R27.03 billion ($1.49 billion), total equity plummeted 47.33 percent to R1.03 billion ($57.13 million). Retained earnings swung into negative territory, falling from R874 million ($48.26 million) to an accumulated loss of R66 million ($3.64 million). With global steel prices weakening, domestic demand eroding, and no clear policy direction in sight, ArcelorMittal South Africa faces a steep uphill battle to restore stability in a market showing little sign of recovery.
