Canadian steelmaker Stelco Inc. today announced financial results for the three months ended June 30, 2020. The company realized net income of zero for the quarter, compared to $1 million net income in the second quarter of 2019.
Q2 2020 revenue decreased $16 million, or 4 percent, from $427 million in Q2 2019, primarily due to a 7 percent decrease in average selling prices and lower non-steel sales of $8 million, partly offset by 6 percent higher steel shipping volumes. Shipping volumes increased from 545,000 nt in Q2 2019 to 576,000 nt in Q2 2020, mostly from higher hot rolled and coated steel product shipments, partly offset by lower other steel product sales including slabs, the company said.
On a quarter-by-quarter basis, Q2 2020 revenue decreased $34 million, or 8 percent, from $445 million in Q1 2020, primarily due to a 7 percent decrease in steel shipping volumes and 1 percent decline in average steel selling prices. Shipping volumes decreased from 621,000 nt in Q1 2020, mostly from lower hot rolled and cold rolled steel product shipments.
Alan Kestenbaum, Executive Chairman and Chief Executive Officer, commented, "On July 17th, we commenced work on the blast furnace reline project at our Lake Erie Works facility. When this 75-day project is completed, we will benefit from significant upgrades that will improve our cost structure and increase our steelmaking capacity and quality. The completion of this project will represent the third strategic milestone that we have reached in 2020. To date we have successfully increased our penetration in downstream, value-added markets and, as we announced last quarter, we secured a long-term supply of competitively priced high quality iron ore as well as an option to purchase a 25 percent ownership interest in the Minntac Mine, the largest and lowest cost iron pellet mine in our region. Collectively, these strategic measures further position Stelco as a low-cost producer with the ability to deploy our tactical flexibility model to take advantage of market opportunities at every point in the cycle as demonstrated by our second quarter results."