AK Steel reported a net loss of $73.4 million for the first quarter of 2009, compared to a net income of $101.1 million for the first quarter of 2008. However, the company expects to see improved financial results throughout the balance of the year, starting in the second quarter.
Net sales in the first quarter of 2009 totaled $922.2 million on shipments of 778,800 net tons, compared to net sales of $1.79 billion on shipments of 1.58 million nt in Q1 of 2008. The company said its average selling price for the first quarter of 2009 increased by four percent over that of the first quarter of 2008, but fell 13 percent from the fourth quarter of 2008, due to lower spot market prices and lower surcharges.
The company experienced an operating loss for the first quarter of 2009 of $99.9 million, or $128/nt, compared to an operating profit of $169.7 million, or $108/nt, in the first quarter of 2008. However, the company ended the first quarter of 2009 with a strong cash and credit position, with total liquidity of over $1.1 billion.
"Despite the worst market conditions in decades, AK Steel employees responded with outstanding cost and quality performances in the first quarter," said James L. Wainscott, chairman, president and CEO. "The hard work our company has performed over the past five years allowed us to endure a quarter of record low steel shipments, and positions us well to make the most of improving markets the balance of the year."
AK Steel said it expects shipments in the second quarter of 2009 to be approximately 800,000 nt, which is slightly higher than that for the first quarter The company anticipates that its second quarter 2009 average per-ton selling price will be approximately four percent below the first quarter of 2009 level. The company also expects planned maintenance costs to be approximately $15 million higher in the second quarter compared to the first quarter, primarily due to a planned blast furnace maintenance outage at its Middletown Works, which is underway. AK Steel expects to benefit from lower operating and raw material costs in the second quarter compared to the first quarter, and to incur an operating loss of approximately $50 million, a 50 percent improvement from the first quarter.