Jobs on the line as AMSA warns of losses


Jobs on the line as AMSA warns of losses

Published Date: 2019-07-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Jobs on the line as AMSA warns of losses

The steel producer says cost-saving initiatives won't be enough to counter the significant challenges it faces.

ArcelorMittal SA (AMSA) plans to cut more than 2,000 jobs as part of a large-scale restructuring of its operations aimed at reducing costs. It made the announcement as it warned shareholders that it would report a headline loss for the first half of its financial year. Its shares toppled as much as 17% on the news.

In a trading statement, the steel producer said although its basic loss for the six months to end-June would improve by at least R700 million, it would swing to a headline loss of at least R596 million for the period from earnings of R54 million a year ago. Headline earnings strip out once-off gains or losses such as retrenchment costs, sales of assets or write-downs. Headline earnings per share would decline by at least 59c, it said.

Although it had embarked on several initiatives to improve efficiencies and address expenditure, it said these cost-saving initiatives wouldn't be sufficient. More significant measures were necessary, including a review of staffing levels, together with other interventions, it said.

AMSA said it would commence with a formal section 189 consultation process to reduce its headcount and expected more than 2,000 positions to be affected.

It said it would a further trading statement once it had more certainty on the earnings ranges for the period. It will release its results on 1 August.

Its shares closed 16% down at R2.91.

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