Gerdau Ameristeel reported a net loss of $57.6 million for the three months ended June 30, 2009, compared to a net income of $262.1 million for the three months ended June 30, 2008.
For the six months ended June 30, 2009, the Tampa, Florida-based longs minimill incurred a net loss of $90.3 million compared to a net income of $425.1 million in the first half of 2008.
During the second quarter of 2009, Ameristeel's net sales totaled $1.0 billion, flat from first quarter sales, though down 60 percent from sales of $2.5 billion in the second quarter of last year. Selling prices in Q2 2009 were down 15 percent from the first quarter and down 31 percent compared to Q2 2008. Meanwhile, shipments rose 13 percent in the second quarter from the first quarter, but dropped 46 percent from Q2 of last year.
In the first half, the firm's net sales totaled $3.1 billion compared to net sales of $4.6 billion from the same period in 2008. H1 selling prices dropped 18 percent from the first half of 2008 while shipments dropped 48 percent from a year ago.
For the three months ended June 30, 2009, Ameristeel's metal spread, or the difference between mill selling prices and scrap raw material costs, was down $59 per ton from the same period in 2008. In comparison to the three months ended March 31, 2009, metal spreads decreased by $88 per ton as the decrease in selling prices was much greater than the decrease in scrap raw material costs. For the six months ended June 30, 2009, metal spread remained flat in comparison to the same period in the prior year.
Included in cost of sales (exclusive of depreciation and amortization) for the three and six months ended June 30, 2009 is a pre-tax charge of $14.6 million and $33.0 million to write down the value of certain of the company's inventory to its current market value. The company says the write down of inventory was primarily related to the impact of certain high-priced raw materials purchased by the company prior to the decline in market selling prices for the company's finished products.
During the three months ended June 30, 2009, the company also incurred a $14.5 million foreign exchange loss on strengthening of the Canadian dollar against the US dollar during this period. This charge arose from the revaluation of US dollar investments held by its Canadian entities.
Mario Longhi, president and CEO of Gerdau Ameristeel, commented: "While market conditions continue to present a difficult operating environment, we did see promising signs that conditions may have reached a bottom. During the quarter, we saw a stabilization of volumes as de-stocking by our customers appears to be slowing, as well as a firming of steel prices across all steel products.”