Welland, Ontario-based oil country tubular goods (OCTG) manufacturer Lakeside Steel reported Friday a net loss of $1,093,059 in fiscal Q1 2012 (ended June 30, 2011), compared to a net loss of $810,662 in fiscal Q1 2011. Lakeside's fiscal Q1 2012 revenue was $53,027,946 which represents a decrease of $9,174,919 or 15 percent from revenue of $62,202,865 for fiscal Q1 2011.
In a press release, Lakeside explained that, "profitability margins were negatively impacted by rapid increases in steel prices that occurred during this purchasing cycle, resulting in higher input costs. During Q1 2012, OCTG customer demand for plain end pipe decreased due to capacity constraints among thermal and end-finishing processors. Given these constraints, customer demand for finished OCTG products increased. The quarter was also negatively impacted by an extended cyclical slow-down that the Canadian OCTG market typically experiences each spring."
Ron Bedard, President and Chief Operating Officer, commented: "The first quarter of this fiscal year has been both challenging and disappointing for the Company. The higher cost of steel, coupled with flat OCTG prices, resulted in margin erosion."