Steel products manufacturer Argent Industrial’s share price slid more than 2% on Monday morning, after it warned of a steep fall into a loss of R2 per share or more.
Monday’s trading update gives an idea of the effect of impairments to its South African operations that it disclosed in November.
Argent warned that earnings per share would fall by between 394% and 413% per share in the year to end-March, to a loss of between 199.81c per share and 213.41c per share, from earnings of 68c per share the year before.
Headline earnings per share (HEPS) are expected to rise by between 1% and 18% during the period.
Argent, which owns a range of manufacturing subsidiaries including steel furniture and mining equipment, said in November that SA’s poor economic climate had resulted in goodwill impairments of R130.4m in the six months to end-September.
The company also impaired four of its properties, and has been downsizing a number of its operations.
Argent Industrial has been a vocal critic of government programmes seen as subsidising South African steel production.
The company has not commented on the recent imposition of steel and aluminium tariffs by the US on South African foundries, although the Department of Trade and Industry said South African aluminium would be more affected than steel, with the steel sector likely to suffer job losses in more niche products.
By 10.45am Argent’s share price had fallen 1.9% to R3.61, having lost 10% so far in 2018. This represented a 65% discount to net asset value per share as reported in results for the first half to end-September 2017.
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