ArcelorMittal South Africa Earnings Down As Demand Dwindles

ArcelorMittal South Africa Ltd. (ACL.JO) Thursday reported a loss in third-quarter earnings on a drop in demand and rising costs, but said the fourth quarter should bring better results due to an increase in steel prices.

ArcelorMittal South Africa, an arm of steelmaker ArcelorMittal (MT), said conditions in the quarter ending Sept. 30 "deteriorated markedly."

The company posted a loss in headline earnings, a common measure of profit in South Africa that strips out a number of one-time items, of 460 million rand for the quarter compared to a gain of ZAR68 million the year before. The company said steel shipments also fell by 1%.

ArcelorMittal said that, in the last quarter of the year, production volumes should rise along with steel prices and that should lead to an improvement in earnings.

The company said the arbitration between itself and Kumba Iron Ore Ltd. (KIO.JO) over a disputed supply agreement following the loss of ArcelorMittal's mining right to the Sishen iron ore mine is scheduled for May 2012. The outcome of the hearing between the Department of Mineral Resources in South Africa and joint respondents Kumba and ArcelorMittal over the lost Sishen right is still outstanding.

-By Devon Maylie, Dow Jones Newswires; [phone]; [e-mail]