ArcelorMittal South Africa Limited (ACL) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome. Thank you for taking the time to join us today as we present our year-end financial results for the period ending 31 December 2021. May I take this opportunity to say we really appreciate your joining us in this occasion. To make sure that at least things are running smooth, we have created a platform for you where you can raise your questions. Please feel free to pop in your questions during the presentation or after the presentation. For cost saving purposes, to reduce at least the usage of ink in your pens, the live broadcasting is taking place and the live recording will be available in our website, www.arcelormittal.com. Also, the presentation is currently available in our website as well. You can access the presentation there. Without further ado, let me present the [ pros ] who will take you through the presentation on our results. Our CEO will first start by giving us an overview focusing also on operational and market review; and our CFO, or acting CFO, Suretha Van Wyk, will take us through the financial review, also touching on capital allocation and the CEO will come back to take us through how we are transforming our business for sustainability and growth and also take us through the outlook for the year. On that note, ladies and gentlemen, I present to you our Chief Executive Officer, Kobus Verster.

Thank you, Tami, for that introduction, and good morning, ladies and gentlemen. Thank you all for joining the presentation of our full year results for the end of December 2021. Also welcome to our board members and senior management also joining the presentation as well as the media shareholders and other stakeholders. A special word of welcome to Suretha Van Wyk, who joins us as acting CFO for the first time. Last year was an exceptionally strong year for the company. The results were supported by a strong environment from a pricing perspective, higher sales volumes and the benefit of robust price cost effect. These all allow us -- allowed us to report the highest annual EBITDA of ZAR 8.6 billion and headline earnings of ZAR 6.9 billion since 2008. An acceleration in free cash flow generation from the first half ZAR 1 billion to a full year ZAR 2 billion resulted in a reduction of our net borrowings by ZAR 2.4 billion to ZAR 1.3 billion. This should be compared to the ZAR 3.6 billion of a year ago. Importantly, the free cash flow performance was after a ZAR 2.7 billion reduction in a significant payables with extended credit terms. This represents a meaningful progress against one of our key strategic pillars being to improve the company's financial resilience while operating on a net cash basis. The business transformation program contributed a further ZAR 2.1 billion during the year of improvements, bringing the cumulative benefits to ZAR 5.6 billion. Our crude steel production increased by 34%, while volumes -- sales volumes increased by 13%. Yet again, we were pleased to be able to limit the increase in our raw material basket to 10% in rand terms against a 42% increase in the international raw material basket. Average international steel prices increased by 91% in dollar terms, while our realized prices increased by 47% in rand terms. Unfortunately, unaffordable and unreliable rail and electricity supply is severely hampering the company's competitive drive and has and is limiting our volume recovery and also will limit our growth aspirations. Regardless, we have increased the capital allocation to improve reliability and quality, enhance improvement in environmental compliance and also to target growth opportunities. Importantly, we have made significant progress on our decarbonization road map development. We will explore these topics further throughout the presentation. Turning to safety. Unfortunately, the company's strong financial performance was overshadowed by our safety results. The board, management and employees were saddened by the 6 fatalities during the year. And we sympathize with the families and friends of these colleagues. Unfortunately, the lost time injury frequency rate increased from 0.58 to 0.98. And the total injury frequency rate increased to 7.8. Improving the safety performance is our highest priority. With the assistance of our parent company ArcelorMittal as well as external expert, the company has intensified its efforts by rigorously applying the necessary safety tools and accelerate in-person training. The step change in safety performance with the greater visibility and tangible care of our company's employees and service provider has started and will be significantly intensifying in the coming year. This will be supported by greater people engagement initiatives with a particular focus on addressing skills gaps, training and development. Our frontline managers and supervisors are being upskilled in areas such as safety engagement, observations and interactions as well as risk awareness and analysis. Beyond ongoing vigilance against COVID-19. Early in the second half of last year, the company launched its own COVID-19 vaccination program. To date, more than 2,500 doses has been administered on site. The ArcelorMittal Group's -- the stated aim is to lead the steel industry to ensure that the global economy achieved net zero emissions. It has made a series of well publicized and sizable decarbonization commitments as the necessary government and funding support is secured. Positively, we have made significant progress during 2021 to develop a road map to achieve a material reduction in carbon intensity by 2030 and net zero by 2050. Numerous bankable, no regret opportunities has been identified, of which energy efficiency improvements are key both from a noncapital and a capital intensity nature. Of critical importance is the establishment and the adoption of international carbon price, supportive policies and enabling funding solutions. Securing the benefit of early mover advantages are being explored with various private and public sector entities. This represents an unprecedented opportunity to redefine South Africa's industrial footprint. Other important ESG initiatives include a greater engagement with the company's environmental stakeholders, improving our BBBEE standing as a priority South African corporate citizen and opportunities to further leverage off an already significant learner training program by exploring upscaling opportunities. Before I review the market and the operating environment, allow me to first set the context, firstly, from an international perspective, then within South Africa and the region; and finally, the company. Last year, the global steel environment was overall positive yet with differing dynamics between the 2 halves of the year. The first half saw a strong demand recovery due to low inventory levels and a strong recovery in steel spreads. This was during the first half that China reduced the incentives to export steel by canceling their export rebates on VAT. Given the scale of the China steel industry and the size of their exports, this represents a material change to the medium-term prospects of the global non-China steel industry. The second half still saw some positive demand. There were steel prices coming off its record highs, falling iron ore prices and very volatile coking coal prices. Global steel production increased follow a strong recovery in demand and returned to pre-pandemic levels other than China earlier than anticipated. This performance reflects the pent-up demand supported by mining, construction and manufacturing activities as well as a notable recovery within the automotive industry as well as increased fixed capital formation levels. Early in the second half, China aggressively reduced steel production to limit output to address energy constraints and limit emissions. Generally, developing -- developed countries demand has recovered more strongly than those of developing ones. And that's largely as a result of higher vaccination rates and a greater government stimulus. Turning to the South Africa -- to South Africa and the regional context. As demand and supply trends normalize, it's no surprise that we have found that steel inventory levels have already returned to normal. Business conditions in South Africa, especially during the second half of last year proved to be more challenging than initially anticipated. This was due to the negative impact on sentiment of events like the civil unrest in July, the labor disputes in the downstream sector, continued electricity load sharing and municipality disruptions and general lockdown fears. In contrast, the anticipation of an impactful progress of the renewable electricity build program, private sector potential involvement in rail and port logistics, the advancing of the next tranche of the shovel ready projects within the infrastructure investment program and the positive spinoff for growth from the upcoming band spectrum auction, all serve as a basis for some optimism. The company's results for 2021 were far from effortless. It was achieved through a significant commitment and effort of our employees and service providers. Several difficulties were responded to throughout the year. Some of these include ramping up production and restoring stability after the restart of all operations in late 2020 and early 2021 as well as the disruptions due to the safety incidents. These factors led to an important decision to undertake a well-considered and targeted capital investment and maintenance program for 2021 and 2022 in order to improve reliability and the quality, further enhance environmental compliance and to pursue targeted growth opportunities. The adverse impact of the civil unrest in July and the spin-off effects of the paralyzing labor strike in the downstream industry during last October necessitate the rebalancing of dispatches to the export market and even worsening rail logistical service, which was aggravated by the significant fire damage at Transnet's Richards Bay facility, unreliable electricity supply at both the generator and in particular, at the local municipality distribution level. We have managed through the extreme volatility in international coking coal prices, notably in the second half by rescheduling our deliveries. With regards to production, global crude steel production increased just over 1.9 billion tonnes by December. This is 68 million tonnes or 4% higher than in the previous year. China's production decreased by 3%, just over 1 billion tonnes. With this decrease, China's market share fell from 58% to 53%. Volumes in Europe increased by 14%. North America was up by 6 -- 17% year-on-year to 118 million tonnes. Russia and Turkey managed to increase their production by around 6% and 13%, respectively to a collective 116 million tonnes, while India rose by 18% to 18 -- 118 million tonnes. Africa's crude steel output increased by 27% to 16 million tonnes, with Egypt up 25% to 10 million tonnes and South Africa, up 28% at 5 million tonnes. We continue to support actions against unfair trade practices in those areas in which we operate and trade. 2021 proved to be a particularly active year as globally the unfair practices, which initially led to the protection being implemented, remained prevalent. We see the risk of unfair practices escalating as supply constraints ease and markets normalize in time. Within Europe, at least 7 new or review investigations were launched and the new or extended protection measures implemented, targeting mainly hot rolled coil, galvanized sheet and rod -- wire rod from China, Russia and Turkey. In the U.S., the Section 232 continued to apply a 25% tariff on all steel products from most countries, though from the 1st of January this year, it replaced the existing tariffs on EU steel with a quota system. Imports above the permitted volumes will continue to be subject to a 25% tariff. Disappointingly, in South Africa, safeguard duties lapsed in August 2021. Turning to sales prices. Average benchmark China export hot rolled coil prices increased by 70% year-on-year, while rebar prices increased by 60%. Benchmark hot-rolled coil prices increased by 9% between the first and the second half of last year with rebar prices up 6% for the same period. Input costs saw the international raw material basket increased by 58% in dollar terms, driven mainly by an increase of 82% and 68% in coking coal and scrap prices, respectively. Turning to our home market. Consensus GDP growth forecast for South Africa are around 4.6% for 2021. And those for near or sub-Sahara African markets between 3% and 3.3%. In SA, apparent steel consumption increased by 25% to 4.5 million tonnes, driven by the recovery of the construction, mining and manufacturing. Volume decreased by 5% to 2.2 million tonnes in the second half compared to the 2.3 million tonnes in the first half of the year. Total steel imports of mainly hot rolled coil, galv sheet and tinplate increased by 47% to 1.4 million tonnes in response to the inventory rebuilt in the local market. Imports account currently for around 30% of South Africa apparent steel consumption, up from 25% a year earlier. You'll recall that about 47% of these imported material are not produced in South Africa. And as predicted during our interim results announcement imports did, in fact, decrease in the second half of the year. Volume fell by 23% to 594,000 tonnes in the second half compared to 770,000 tonnes in the first half. Crude steel production increased by 34% to 3 million tonnes. As I said earlier, our sales volume increased by 13% to 2.5 million tonnes due to a 16% rise in domestic sales to 2.2 million tonnes, while export decreased by 5% to 302,000 tonnes. The regional mix of exports improved significantly with Africa [ overlend ] 218,000 tonnes, representing an increase of 47%. Overall, total sales decreased by [ 4% ] between the first and the second half. Our realized prices in dollar terms increased by 62%. In rand terms, we realized a 47% increase in prices as a result of the strengthening of the dollar/rand exchange rate by 10%. Steel prices in rand terms increased by 19% between the first and the second half of the year. As we've mentioned during our interim results, the improvement in the second half pricing reflects the lagging realization of the higher international steel prices, mainly due to the nature of our order book. ArcelorMittal South Africa is the only primary producer in South Africa which support the downstream industry through a formal support program. Our industry support saw a 67% increase to ZAR 308 million in value-added export assistance and rebates. The company's raw material basket represents 43% of the cash cost per tonne that was up only 10% in rand term -- in rand terms. And it's a reflection of the successful diversification of our raw material supply base. Consumables and auxiliaries, which represent around 30% of cash cost per tonne increased by 5%. Within that category is electricity tariff increases of 14%. Our fixed costs increased by 47% to ZAR 7.4 billion in 2020. This is largely as a result of higher activity levels the additional investment in maintenance and temporary staffing levels to manage the COVID-19 risk. On a rand per tonne basis, fixed costs increased by 9%, with total cost per tonne [ increase ] was limited to 8%. The company's average capacity utilization increased from 42% in 2020 to 60% last year, and we are currently around 79% as evidently, our fixed cost and capital allocation, wide-ranging significant maintenance activities we're undertaking -- have taken affecting all production sites. Some of these include in November and December at Vanderbijlpark, we have done substantial maintenance work on the second blast furnace, which include refractory shotcreting and certain electrical conveyor and structural repairs. In December, Newcastle Works blast furnace underwent a similar refractory shotcreting following the postponement of the mini reline to the second quarter of 2022. We have moved the mini reline out mainly due to the risk that appropriate skills and equipment would not be available during December. After safety, production reliability and stability to enable improved delivery to our customers are key focus areas. To deliver against these objectives, efforts continue to attract new process and maintenance-related skills and to develop existing skills through specialized training programs, all supported by a refreshed and a more structured management system. As reported last year, as a result of the safety incident at the Vanderbijl coke-making area, that was the main reason for the lower commercial coke production. Although commercial market coke production was down 43% or lower by 160,000 tonnes by supplementing available inventory, sales volumes remained flat at 308,000 tonnes. I will now hand over to Suretha to take us through the financial numbers.

Thank you, Kobus. Good morning, ladies and gentlemen. Our revenue was up by 61% to ZAR 39.7 billion, this was due to improved sales volumes of 13% and improved realized sales prices of 47%. We report an EBITDA profit of ZAR 8.6 billion, representing a ZAR 8.5 billion improvement over 2020. This consists mainly of ZAR 8.2 billion EBITDA profit from our steel operations and ZAR 820 million EBITDA profit from our nonsteel operations. The waterfall graph tracks the evolution of the EBITDA profitability. Total shipments increased by 283,000 tonnes driven by increased domestic shipments and product mix, which positively impacted EBITDA by ZAR 3 billion. Average net sales prices increased by 47% in rand terms, of which local prices increased by 47% and export prices increased by 37% impacting profitability by ZAR 7.4 billion. This includes the impact of exchange rate movements. Higher raw material prices and other factor costs had a negative impact of ZAR 2.1 billion. This was mainly driven by higher scrap or coal, electricity, gases and refractory prices, which was partially offset by a stronger average exchange rate. Other than the uncontrollable price increases of rail and electricity, other price increases have been managed well. Overall, fixed cost increased by ZAR 2.4 billion, largely impacted by higher activity levels, additional temporary staff to mitigate COVID-19 impacts and to sustain production as well as some investment in maintenance. This was partially offset by our business transformation program savings of ZAR 737 million. Additionally, the business transformation program contributed sales of ZAR 1.3 billion, realizing a total of ZAR 2.1 billion against the ZAR 1.5 billion realized in 2020. Our non-steel operations segment reported an EBITDA profit of ZAR 820 million, an improvement of ZAR 435 million compared to 2020. Sales volumes of market coke remained flat at 308,000 tonnes, while sales prices increased by 30%. Consequently, this resulted in our headline earnings profit of ZAR 6.9 billion. This is an improvement of ZAR 8.9 billion when measured against the headline loss of ZAR 2 billion of 2020. Our condensed consolidated statement of profit and loss reflects a fair value adjustment to investment properties of ZAR 228 million. This is as a result of various properties that have deteriorated in value due to macroeconomic factors and is driven by the annual external property valuation. On the back of free cash flow of ZAR 2 billion, net borrowings decreased by ZAR 2.4 billion to ZAR 1.3 billion over the 12 months period from December 2020. The free cash flow performance was after a ZAR 2.7 billion reduction in a significant payable with extended credit terms. We generated ZAR 3 billion cash from operations of the ZAR 6.1 billion was invested in working capital driven by our increased business activities. Inventories were higher by ZAR 5 billion. Our metal stocks increased from a low level of 277,000 tonnes in December 2020 to a more normalized level of 483,000 tonnes in December 2021. Receivables higher by ZAR 1.1 billion due to higher sales volumes and prices. This was offset by higher payables of ZAR 375 million. We incurred ZAR 261 million net finance costs, which is in line with the ZAR 269 million incurred during 2020, while ZAR 860 million cash was utilized on capital projects. Cash and liquidity management will continue to remain a key priority. Cash generators will be applied to reduce our debt and fund our capital projects. Capital expenditure of ZAR 965 million is ZAR 559 million higher than the corresponding period with around 83% being spent on sustaining operations, 7% on environment and the balance on projects to enhance quality and the product portfolio. Key investments to preserve and increase asset capacity include the delivery of long lead time equipment for the blast furnace mini reline at Newcastle that is planned for quarter 2 2022, the ongoing coke [ batteries through all ] repairs, the main drive upgrade at the plate mill, the replacement of the hot strip finishing mill X-ray grade and the upgrade of the coating equipment on the galvanizing line. The coke oven gas cleaning plant project is progressing as planned. The sales execution and plant equipment manufacturing will continue in 2022. On that point, let me hand back to Kobus, who will elaborate further on our focus areas and priorities for 2022.

Thank you, Suretha. ArcelorMittal South Africa's transformation for sustainable growth strategy is being actioned by focusing on 3 priorities: the repositioning, restructuring and revitalizing. Let's turn to some of the key actions which underpin these priorities. Firstly, a step change in safety performance with greater shop floor visibility. This is supported by a greater people engagement initiative with a particular focus on addressing skills gaps, training, development and diversity. Secondly, in 2022, the business transformation program will advance to a more ambitious and integrated multiyear value plan program targeting: greater integration between suppliers and customers to improve the overall efficiency of the supply chain and the value chain, including integration and consolidation opportunities; improving the product and the value offering to our customers; adopt a more agile and variabilized fixed cost structure; pursuing alternatives to counter the unsustainable cost inflation of both rail and electricity; and implementing the decarbonization road map which is being finalized for formal announcement in 2022. Thirdly, continue to drive our strategic raw material supply diversification. And finally, as mentioned earlier, the additional fixed costs and capital investment that has been allocated to improve reliability, environment and growth opportunities. If we look at the outlook for the first half of this year, I think the outlook for global steel demand remains generally positive heading into 2022. In South Africa and the neighboring countries, it is likely to -- the demand may ease back to more moderate growth levels. We have seen a correction in international prices coming off their highs, but not fairly substantially supported by robust raw material prices. After safety, securing the first benefits of the value plan program will be a key focus area for ArcelorMittal South Africa. And as always, the company's financial results will continue to be impacted by the volatility in the dollar/rand exchange rate. Thank you all. We will now take questions.

Thank you very much Kobus and Suretha. It's now time at least for questions. I can see we've got some questions already from [ David Fraser ]. The question reads, please unpack and explain the unwinding in discounts, finance cost charge of ZAR 502 million, [ H2 ] charge of ZAR 170 million, why would 80% of this be charged in the second half?

Yes. Thank you for that question. Our environmental provisions has a maturity of 10 years and 15 years. And for that, we have to present value that. So we normally do our establishment of our increases and our discount rate tools the end of the year to relook at our cash flows for the future, and that is also part of the unwinding of the discount rate, together with the group long that we also have to present value because of the interest -- the free interest rate of an amount of ZAR 1 billion that we received from group. I hope that answers the question.

Thank you, Suretha. We've got a question from anonymous. Congratulations on the much improved results. Four questions for me. Firstly, you have mentioned rail challenges in the course of the year. Can you please kindly provide estimate of financial loss as a result of this? Secondly, where do you see margins normalizing into year '22 to '23? Lastly, can you take me through to the ZAR 5 billion savings in inventories? How should I look at this extra 9% capacity utilization? How should I look at capital allocation [ further ] into year '22 to '23?

Yes. I think in terms of the rail, I think we don't have -- really have an estimate, but it's north of ZAR 100 million. What we experienced from a rail perspective is we reached dangerously low levels. And to protect assets, we have from time to time have to stop furnaces. Currently at the moment, we are stopping furnace in Newcastle to preserve stock. So difficult to fully quantify that. In terms of the margins, I think you have to look at the margins from a few angles. Firstly, we don't -- we see prices came off in the last quarter of last year internationally. So as you -- as in last year, we were lagging the cycle upwards, we would lag the cycle downwards as sort of the structure of our order book. But what's different, you don't see collapsing prices, as you've seen after 2008. Spreads are still strong and relatively healthy. And I think the only uncertainty is how coking coal develop over time. In terms of inventory, we added 200,000 tonnes roughly buildup in steel stocks, either final or work in process. So if you take the absolute stock number plus the higher prices, that will account for the ZAR 5 billion movement. I think your last question relates to capital utilization and capital allocation. Capacity utilization, we would like to improve above the 79% or 80%. Part of that, even from a demand perspective, we believe that we can displace or replace substantial imports. So even without growth, market should be there for us. And I think it's actually at the moment, dependent on the rail availability, which at the moment is sort of capping our increase in volumes. From a capital allocation perspective, you saw we spent around ZAR 0.5 billion in 2020, close to ZAR 1 billion at this last year. This year, from a pure CapEx perspective, that will be substantially above ZAR 2 billion. So where projects has not been completed in the last 2 years. That will be focused on. And also with a better financial positioned balance sheet, we can actually start allocating a bit more capital to quality projects and growth projects.

Thank you, Kobus. Two questions from [ David Fraser ]. Is Vanderbijlpark ’s second blast furnace back in operation post the remediation work? Secondly, what can we expect of coke volumes in 2022? Are we back to a steady state run rate?

Firstly, blast furnace : Vanderbijl is back in operation. The repair work was done very successfully within budget and within time. It's a major operation. And I must say the work was done very successfully and the restart, if I compare how we perform versus other companies in the world. In terms of coke, I have to come back to you from a volume perspective. Production would be back to more normalized levels. So I would assume that given the increase in our steel production would consume a bit more coke, that we would be around 10% reduction in volumes but I'll ask somebody just to confirm that to me. It's okay. So that's about right. So despite the inventory absorption, that will be replaced by normalization in the coke production. As you recall, that's where we had the incident, instability in the year. But the quarter 4, we were at normalized sort of production levels and stability.

Thank you, Kobus. From [ Buda ]. AMSA [indiscernible] full year capacity utilization is significant in '21. Does it include Saldanha works?

No. We exclude Saldanha works. All our numbers basically exclude. Saldanha works remain under care and maintenance. So that 80% is on our current assets being Vanderbijl, [ Vereeniging ] and Newcastle.

From anonymous, why [indiscernible]?

I think we've been fairly clear that -- I mean, the company has made substantial losses over many years, the balance sheet up to last year and still has been fragile. So we intend to bring that down further. I think it's important that one understand that there's substantial opportunities from an investment perspective on the decarbonization road map. So until we have more -- a better track record of financial sustainability, we will review that at the appropriate time.

Next comment is from Bruce. What effect has load sharing had on the Newcastle Works specifically? And how does the company plan to overcome challenges of intermittent electricity supply?

Electricity interruptions all over is twofold. It's actually from -- it's more from a municipality perspective. Eskom engaged with us, and we have a load curtailment. So they will instruct us to reduce consumption by 20% or 30% or 10%. And then you will -- we will shut down plants to come within those limitations. The problem is if you have an unnotified event. That will not necessarily have a big impact, but the immediate impact will have a -- I mean, we had fire situations. We have plant interruptions. So the immediate impact on the plant while operating and you have a [ total trip ] is substantial. Sometimes you would take a few days to take out some of the metal that's got cold and stuff like that.

Thank you, Kobus. From Thabang. Question one. Going forward, what is the sustainable level of CUR that management can target?

I think most probably around 90%. But you also have to -- we have many plans whereby we will increase capacity over time. So nameplate capacity can be something at the moment. But over time, we will gradually invest to do -- to debottleneck certain areas and increase capacity.

Second, what is the speed of CUR for [indiscernible]?

Suretha, do you have that? I'll get you the number.

We'll get to the number, Thabang. What is the converting factor for liquid steel production to crude steel production? In other words, [ tell us now ] behind the change in reporting.

I think crude steel is more and more internationally these days. So for us to report relative to other reporting, it became crude steel becomes the norm. I'm not quite sure. I would think there was probably a 3% yield or something. But Thabang, I can come back to you on both of those.

Thank you, Kobus. Could you kindly outline what the significant maintenance program in 2021 consists of?

Yes. I think firstly, in 2020, there was very limited maintenance or -- so certain things at a backlog, and that was as a result of a few factors. One is preservation of cash. The second one is availability of spares and the other one is availability of skills. So very often you cannot do certain maintenance suppose the spares are not available. And secondly, many of our work, especially our large shutdowns, we need international OEM experts to assist. As an example, in December, many of our work wasn't done because as a result of our lockdown scenario, many people just left and moved back to Europe not completing certain maintenance. So it's all around some of the backlogs and to make sure that we improve the reliability of our overall assets. If I use the coke as an example, as I said earlier, it's very disruptive up to the last quarter of last year, very stable operations has returned to that area.

Thank you, Kobus. Is the difference between the ZAR 965 million in the presentation and the ZAR 860 million in the financials, the unpaid portion of CapEx?

Yes, yes. I think the one is income statement. The other one is a cash flow.

Is the cost of the new [ capital ] line still expected to be ZAR 1.5 billion?

No, no, no. The mini reline in the next quarter of this year is around ZAR 400 million, it's about ZAR 400 million.

What proportion of the met coal business is in nonsteel?

In the nonsteel segment, we only have our coke and our tar and in our properties as well as our Pretoria Works and also on the care and maintenance and then the Thabazimbi mine.

What are the other revenue-generating segments in nonsteel?

I basically answered that to say it's your coke and your tar and in your property management and Thabazimbi.

And lastly, what proportion of non-steel revenues and EBITDA was from the market coke business?

Market coke, the EBITDA profit of ZAR 940 million. Not sure what the revenue was. But that was the EBITDA part.

Why do you believe you can displace imports? And lastly, are creditor [ and ] sales volumes an indication of sustainable levels going forward?

I think the displacement of volumes, I mean, last year, many of the imports was as a result of our own production uncertainty and reliability. So people have hedged themselves to import more than they would have normally done. So once we've proven our reliability, that displacement can happen, I think, quite easily. I think from a volume perspective, we think volumes in asset to be roughly flat. So for us to have growth, we have to debottleneck, increase production volumes and displace imports. And then I think Africa will land maybe not immediately, but also offer medium and longer-term great opportunities from a volume perspective. Producing on export, we would like that to be sort of our last option.

I will take this one from [ Quintin ] though he's going to have a [ share ] after this one. In regards to stopping furnaces at Newcastle Works to preserve stock, how will this impact Newcastle Works and its staff?

Well, we're stopping the furnace as short as possible. So typically, we will stop for 16 hours a week. And as soon as we can normalize the -- well, we won't normalize the iron ore supplies, but at least we can reduce the risk by having an adequate buffer stock. So we have maximized road transport to the level that's possible for us. And hopefully, by stopping, we won't expose the furnace to a sudden risk. What you don't want to is have a situation where you have to stop unprepared and you get cold conditions or even this furnace freeze. So I think from -- this is something that one of our key strategic nightmares is how do we resolve the Transnet risk in our business. And that will most probably from a Newcastle perspective, the fact that we have a planned stop for 2 months from end of April that will give us time to build up the buffer stock for the rest of the year.

And the last question from Bruce is COVID-19 vaccination mandatory for ArcelorMittal South Africa staff and which vaccine is being administered?

No, it's not mandatory, although we do encourage people to do it as far as possible. And my recollection is we do both -- yes, Pfizer as well, yes.

Thank you very much. That was the last question that we received. The live record -- the recording will be available in our website at 11:30, www.arcelormittalsa.co/za, and the presentation, you can get it as well there. Let me hand over to the CEO for the parting [ shots ].

Yes. I think everyone, thank you for joining us. 2021 was for us, from a financial perspective a rewarding year after many years of struggling. And we're glad that we were able to attend to some of these [ historical ] issues at our balance sheet. And we're looking forward now to get this business on the sustainable path longer term. Thank you.

Thank you very much, and goodbye, and thank you for joining this master class on how to turn a loss-making entity into a profitable one. Thank you. Bye-bye.