ArcelorMittal SA slashes losses in tough 2025

ArcelorMittal South Africa Limited (Amsa) has reported a significant reduction in financial losses for the year ended 31 December 2025, even as it battles a “material uncertainty” regarding its ability to continue as a going concern. The company successfully reduced its Ebitda loss by 63% to R1 098 million and its headline loss by more than a third to R3 355 million, primarily driven by the aggressive winding down of its chronically loss-making Longs Business into care and maintenance.

Despite these improvements, the group’s financial position remains precarious. Total liabilities now exceed total assets by R317 million, and net borrowings have climbed to R6 448 million. Independent auditors, EY, issued an unmodified review report but included an “emphasis of matter” regarding going concern, highlighting the company’s dependency on successful discussions with the Industrial Development Corporation (IDC) for a R1 000 million loan facility and the continued support of its lenders.

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The pivot to flats and industrial repurposing

With the Newcastle facility now in care and maintenance, Amsa is shifting its strategic focus. The primary objective for the Newcastle site is a transition into an industrial park, with plans to monetise assets and inventories to contribute to earnings starting in 2026.

Meanwhile, the Flats Business remains the core of the group’s turnaround strategy. While sales volumes for Flats were down 4%, crude steel production in this segment increased by 8% to 1.8 million tonnes, driven by improved plant reliability.

The restructuring has necessitated “structural footprint adjustments” expected to contribute R740 million in support of the 2026 business plan. CEO HJ Verster noted that the priority for 2026 is to restore the core Flats Business to operating profitability, while also focusing on quality, service, and competitive pricing.

Read: ArcelorMittal ceases production at Newcastle, still no rescue in sight

Global headwinds and domestic risks

Amsa’s performance was hamstrung by a 16% drop in revenue to R32 291 million, impacted by a 12% decrease in total sales volumes and a 5% fall in realised rand steel prices. The global steel industry continues to struggle with overcapacity; while China’s output hit a seven-year low, its exports reached a record 119 million tonnes, saturating international markets.

Domestically, high levels of imports, reaching 37% of South Africa’s apparent steel consumption, have constrained domestic supply and market share. Looking ahead, management cited the rand’s current strength against the dollar as a material risk to the 2026 first-half outlook.

The company is pinning hopes on commitments from the Department of Trade, Industry and Competition (DTIC) to implement fair trade protections in early 2026 to level the playing field against unfair imports.

ArcelorMittal South Africa share price

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