Mittal Steel South Africa, a subsidiary of Arcelor Mittal steel group, the world's largest steel producer, announced Wednesday a 19 percent increase in headline earnings to 1.5 billion rand (216 million dollars) in the first quarter of 2007, primarily attribute to higher domestic demand and increased international prices.

This translated into headline earnings per share of 337 cents from 284 cents in the previous quarter. Headline earnings exclude profits or losses associated with discontinued operations, fixed assets or related businesses.

An improved sales mix and a weaker rand-to-dollar exchange rate also contributed to the higher earnings figure, which was offset by an increase in raw material costs and lower export volumes, the company said in a statement.

Revenue grew 14 percent to 7.24 billion rand in the first quarter, some 24 percent higher than last year’s same period.

On the recent ruling by the Competition Tribunal that the company had charged "excessive prices" for its flat steel products in South Africa, Mittal said it had lodged an appeal and that arguments on any administrative penalties would be heard end of July.

The Tribunal earlier this year found Mittal guilty of contravening the Competition Act by "charging an excessive price for its flat steel products to the detriment of consumers." It has yet to decide on a penalty or remedy, which could include structural remedies to prevent Mittal reoffending. The average prices for Mittal Steel’s export product range increased by 27% compared to quarter one last year.

Mittal says the price hikes on a number of products are due to higher input costs.