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Stelco Holdings Reports Third Quarter 2019 Results

Steel News - Published on Mon, 18 Nov 2019

Image Source: markets.businessinsider.com
Canadian steel maker Stelco Holdings Inc announced financial results of the company for the three months ended September 30, 2019. Mr David Cheney, Stelco Holdings' CEO, said “I am pleased to report that we were able to increase our shipments by 20%, quarter-over-quarter, including a 31% increase in our sales of cold-rolled and coated sheet products. This is validation from our customers that our capital investment to install state-of-the-art batch annealing and tempering capabilities was what the market demanded. We expect to grow our cold-rolled and coated shipments, including galvanized, to further diversify our product mix and increase sales of value-added products. Looking forward, demand from our customers remains strong and we affirm our expectation to ship approximately 1.3 million tons over the second half of the year."

Q3 2019 revenue decreased CAD 144 million, or 23%, from CAD 619 million in Q3 2018 to CAD 475 million in Q3 2019, primarily due to a 28% decrease in average selling price for steel and a CAD 31 million decrease in non-steel sales, partly offset by a 12% increase in steel shipping volumes.

The average selling price of steel products decreased from CAD 980/nt in Q3 2018 to CAD 704/nt in Q3 2019, due largely to decreases in market prices for flat steel products.

Shipping volumes increased 68 thousand nt, from 586 thousand nt in Q3 2018 to 654 thousand nt in Q3 2019 reflecting strong demand in Q3 2019 and to lower sales in Q3 2018, due in part to an extended hot strip mill outage in the prior year quarter.

Net income for the quarter of nil decreased by CAD 125 million, or 100%, from CAD 125 million in Q3 2018, primarily due to lower gross profit of CAD 133 million, CAD 2 million decrease in finance and other income, partly offset by lower selling, general and administrative expenses of CAD 4 million, CAD 3 million in lower finance costs and CAD 2 million decrease in restructuring costs.

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Posted By : Rabi Wangkhem on Mon, 18 Nov 2019
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