Stelco Q2 headwinds stem from destocking, falling market prices and 232 tariffs
Balance sheet continues to strengthen, although headwinds impacted revenue by 17% over last year
HAMILTON, Ont. – Stelco Holdings Inc. announced financial results for the three months ended June 30, 2019.
Net income for the quarter was $1 million, an improvement from a net loss of $11 million in the second quarter of 2018
The Hamilton-based steelmaker reported Q2 2019 revenue of $431 million, a 39% change over last year’s $711 million in Q2.
“We faced a number of strong headwinds, including destocking, falling market prices and continued 232 tariffs, that impacted us throughout the quarter,” said David Cheney, CEO, Stelco Holdings. “Despite these headwinds, we lowered our cost per ton, we remained profitable, and we generated positive cash flow. Further, as the quarter concluded many of the previously mentioned headwinds ceased and were replaced with tailwinds: customer demand is strong, reflected in a robust order book and extended lead times; steel prices have rallied; 232 tariffs have been eliminated; and we are aggressively pursuing further cost reductions.”
During Q2 2019, with the repeal of tariffs on US bound sales of steel, adjusted net income was $6 million. Last year this figure was $165 million, reflecting a 96% change.