Stelco Posted Q4 Net Loss on Unprecedented Steel Price Drop

SEATTLE (Scrap Monster): Hamilton, Ontario-based Stelco Holdings, Inc. posted net loss in the fourth quarter of the previous year. The reduced earnings were mainly on account of challenging market conditions including unprecedented drop in steel prices.

Stelco reported net loss of $24 million or 27 cents per diluted share for the quarter ended 31^st December, 2019. This is upon comparison with net income of $110 million or $1.23 per diluted share in the corresponding fourth quarter in 2018. The revenues recorded significant downfall from $648 million to $435 million over the year. For the full year 2019, the company posted net income of $20 million. Also, the yearly revenues totalled $1,841 million in 2019.

The company’s average selling price of steel in Q4 ’19 witnessed notable decline by 28% from the year-ago quarter. The shipment volumes were down by almost 6%. The drastic decline in steel prices impacted the margins. Incidentally, steel prices nosedived by almost one-third from the peak level recorded in Q3 last year.

As part of attaining financial sustainability, Stelco plans to make investment at its pig caster in the second half of 2020. Consequently, it plans to commence pig iron shipments by Q4 this year. Additionally, reline of the blast furnace will further boost production.