Overview

Significant escalations in electricity and raw material prices experienced during 2010 continued throughout 2011. This, together with pressures on global steel prices and various operational problems placed enormous pressures on operating margins, resulting in a headline loss of R52 million for the year ended 31 December 2011. No dividend has been declared.

There was a reduced headline loss of R260 million for the fourth quarter of 2011 compared with the R460 million loss reported in the preceding quarter and R497 million loss for the corresponding quarter of 2010.

EBITDA halved to R1.7 billion with the main contributors being lower sales and significantly higher input costs.

Production was severely impacted by four significant production interruptions during the year; the structural failure of the blast furnace dust catcher at Newcastle Works and a 43 day stop to repair the corex tap-hole at Saldanha Works, both in August, and chilled hearth conditions experienced at the blast furnaces in Newcastle and Vanderbijlpark Works during the beginning of the year.

Safety is a major focus throughout the group and our Lost Time Injury Frequency Rate (LTIFR) for the year dropped 24% to a new record of 1.24, with all business units showing improvement. Despite this there were five unfortunate fatalities during the year, as a result of which a major refocus on entrenching compliance with the group’s fatality prevention standards and safe behavior code was initiated as part of the group’s Journey to Zero programme for the elimination of all injuries and fatalities from the workplace.