Legally insolvent Canadian steelmaker Stelco has reported its biggest quarterly loss in two years; For the fourth quarter 2005 the company posted a net loss of Canadian (CA) $120 million (US$102.5 million), or CA$0.17 per share, compared to a profit of CA$1 million, or CA$0.01 per share, earned in the same period of 2004.
For the year ended December 31, 2005, Stelco reported a net loss of CA$73 million, or CA$0.71 per share, compared to net earnings of CA$64 million, or CA$0.63 per share, for fiscal 2004.
The Hamilton, Ontario-based company attributes these lackluster results to discontinued operations, which alone, accounted for CA$53 million of the CA$120 million lost in the fourth quarter.
Increased costs, maintenance repairs, and supply costs associated with planned shutdowns were additional factors cited by the company to account for these fiscal results.
Stelco's President and CEO Courtney Pratt commented on the results, "The past year was one of transition for Stelco. The bottom line results were recorded in the context of much more positive developments that bode well for the company's future. These included the achievement of a consensual restructuring plan, the conclusion of agreements to place the pension plans on a sound financial footing, the sale of non-core assets, the announcement of a contribution by the federal government to the funding of our electricity co-generation projects, and the ratification of a new collective bargaining agreement at Lake Erie."
Looking forward, Mr. Pratt said, "Stelco is poised to emerge from court protection on March 31, 2006 with an improved financial position, a new board of directors, a new president and chief executive officer, and a new organizational structure. These factors, together with a dedicated workforce and quality products, provide the opportunity for Stelco to be a viable and competitive steel producer going forward."
Stelco is a major producer of flat rolled products, and is one of
Canada's longest-established companies. It is currently undergoing the final stages of a court-supervised restructuring. Once the company emerges from court protection, it will be focused on its two Ontario-based integrated steel businesses located in Hamilton and in Nanticoke. These operations produce high-quality, value-added hot rolled, cold rolled,
coated sheet and bar products.