South African steel producer Ispat Iscor’s share price on Monday soared to an all-time high ahead of the group’s interim financial results on Wednesday, when it is expected to announce strong results driven by a high global steel price and restocking by local consumers of steel.
At 1.45pm on the JSE Securities Exchange (JSE), Iscor was quoted at R43, up 90 cents or 2% from Friday’s close.
Earlier, Iscor touched R43,90 — its highest level since its unbundling in November 2001.
Iscor is expected to report a 36% increase in interim headline earnings per share to 349 cents for the half-year to June 2004, from 256 cents in the previous comparative period in 2003, a survey of four analysts conducted by I- Net Bridge shows.
Forecasts ranged from 271 cents to 380 cents.
The group’s March quarter headline earnings per share were 150 cents and the June quarter’s headline earnings per share are expected to have been close to 199 cents.
The key reason for the expected increase is extremely strong global steel prices, driven mainly by demand from China — the world’s largest producer and consumer of steel.
In addition, Iscor would have been boosted by local steel prices and local demand.
However, an analyst warned that Iscor’s earnings could be hit by the group’s payment to LNM Holdings, the world’s second-largest steel group, which also has a 50% stake in Iscor, as part of the business assistant agreement between the two groups.
Iscor will release its interim results on Wednesday August 18 at 7am.
The group is also expected to report an interim dividend per share of 100 cents, unchanged from the half-year to June 2003. Forecasts ranged from 75 cents to 180 cents.
At the end of March, Iscor held net cash of R505-million and is expected to have increased its cash holdings further. As a result of the strong cash flows, some analysts are expecting that Iscor could declare a special dividend either on August 18 or later this year. — I-Net Bridge