Welland, Ontario-based energy pipe manufacturer Lakeside Steel reported Wednesday that during its fiscal second quarter 2012 (three months ended September 30, 2011), it incurred a net loss of $7.6 million, compared to a $1.2 million net income in the comparable quarter last year. Additionally, for Lakeside's fiscal year-to-date, the company suffered a net loss of $8.7 million, down $9.1 million from the same period in fiscal 2011.
Lakeside cited a number causes for the loss, including $3 million margin erosion due to low-priced imports and the sale of plain end pipe at higher raw material costs; $1.4 million in start-up costs for its new Alabama and Texas facilities currently under construction also contributed to the loss.
Ron Bedard, President and Chief Operating Officer, commented: "The first half of this fiscal year has been a challenge for the Company as the rapid and sustained shift in customer demand towards fully finished OCTG products, the constraints in thermal treatment and end finishing capacity in the market, higher cost of goods sold and the presence of low cost overseas imports of plain end products all contributed to an erosion of the Company's margins."