bold spirit - ArcelorMittal South Africa

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22 ArcelorMittal South Africa Annual Report 2010 Finance report continued Cash flow Cash flows are detailed below: 2010 Rm Year ended 31 December 2009 Rm Cash profit from operations 3 766 1 828 Working capital (1 100) 2 878 Cash generated from operations 2 666 4 706 Interest income 69 199 Finance costs (85) (122) Investment income and dividend from equity-accounted investments 128 91 Realised foreign exchange movement (58) (529) Income tax (653) (934) Dividends (602) (1 627) Capital expenditure (1 714) (914) Investment in associate (120) (524) Repurchase of shares (3 918) Repayment of borrowings and finance lease obligations (374) (157) Decrease in cash (743) (3 729) The cash outflow of R743 million is largely as a result of the investment in working capital requirements of R1 100 million. This was mainly the result of an increase of R1 544 million in inventories as prices of input materials increased, while volumes remained on 2009 levels. Capital expenditure nearly doubled due to the cut-backs during 2009. The R120 million investment in associate was mainly for participation in the rights issue of Coal of Africa. Dividend An interim dividend of 150 cents per share was declared and paid during 2010. Following the headline loss of R427 million made for the second half, no final dividend was declared. Share performance Over a five-year period the share price has increased by an average of 6% per annum compared with the 20% per annum rise of the All Share Index over the same period. Up until the end of 2008 our share price had performed better that the All Share Index but has underperformed since dispute with SIOC.
23 ArcelorMittal South Africa Annual Report 2010 Competition Commission matters The Competition Commission (“the Commission”) is formally investigating the following four cases against ArcelorMittal South Africa. Scrap metal investigation Arising out of an immunity application from the Commission’s 2008 scrap metal industry investigation, it alleges that we contravened of the Competition Act in our dealings with a major scrap supplier, of substantially lessening and/or preventing competition in the scrap market. Price fixing of flat steel products Following a complaint, the Commission summoned us to provide it with information regarding an investigation into the allegation that during the period 1 January 2005 to the present time we and another major flat steel producer in South Africa engaged in price fixing. Investigation into wire rod, flat products and fencing standards The Commission is investigating allegations of preferential pricing to a large long-steel-products customer between the period September 2000 and December 2008 and differential pricing strategies for flat and long steel products to customers with respect to transport of the affected products. We are co-operating fully with the commission in these investigations and have delivered all the requested documentation to the Commission. None of these matters has been referred by the Commission to the Competition Tribunal (“the Tribunal”). Matters that have been referred by the Commission to the Tribunal have been disclosed as contingent liabilities in the notes to the financial statements as fully described on page 193. Tinplate investigation The Commission alleged that we charged excessive prices for our local tinplate and gave special rebates to large tinplate customers.
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bold spirit - ArcelorMittal South Africa

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