Stelco reports results for second quarter 2004
Stelco reported net earnings of $42 million in the second quarter ended on June 30, 2004 compared with a net loss of $83 million in the second quarter of 2003. Six-month net earnings for first half 2004 were $6 million compared with a net loss of $127 million for the same period in 2003.
Sales revenue in the second quarter was $884 million compared with $700 million for the same period last year. The rise in sales is mainly attributed to increased selling prices and surcharges.
Production in the second quarter of 2004 was 1.327 million semi-finished tons, up from the 1.261 million tons produced during the same period in 2003. This increase was attributable primarily to reduced operating levels in the second quarter of 2003 caused by weak market conditions and planned steel inventory reduction.
Production results were also affected by a five-day blast furnace outage at Stelco Lake Erie in June 2004.
Stelco President and Chief Executive Officer, Courtney Pratt, announced that these results were expected in such a period of unprecedented and unsustainable high steel prices. Despite positive earnings driven by strong demand and low availability, Stelco's net short-term debt was relatively unchanged. According to Pratt, without strong cash generation and lower costs the company cannot regain a competitive position in the North American steel sector.
Accordingly, as SteelOrbis reported on July 30, Stelco decided to decrease its product range and has ceased
production in the
wire and
pipe sectors so it can increase the quality of its products and focus on those products which make Stelco unique in the market place.