TimkenSteel reports net loss in Q4

Friday, 26 February 2021 21:04:59 (GMT+3)   |   San Diego

TimkenSteel today reported fourth-quarter 2020 net sales of $211.2 million and a net loss of $12.8 million. In the Q4 2019, net sales were $226.9 million with net loss of $84.6 million.

In Q4, net sales increased 3 percent compared with $205.9 million in the third quarter of 2020, driven primarily by a continued rebound in automotive demand. Compared with the prior-year quarter, net sales declined 7 percent largely driven by lower ship tons, the company said.

When compared with the prior-year quarter, ship tons of 164,000 declined 9 percent due to lower industrial, energy and OCTG billet demand, partially offset by higher automotive shipments. However, ship tons increased 6 percent sequentially as a result of higher automotive and industrial shipments.

The company said manufacturing costs improved sequentially as a result of higher melt utilization and the timing of the planned annual maintenance shutdown that occurred in the third quarter of 2020. Compared with the prior-year quarter, manufacturing costs improved due to higher melt utilization and the impact of systemic cost reduction actions.

For the full-year 2020, net sales of $830.7 million declined 31 percent compared with the prior year, driven largely by the negative impact on customer demand from the COVID-19 pandemic and a weak energy market, the company said. Additionally, the average raw material surcharge per ton decreased 25 percent as a result of lower scrap and alloy prices, which was slightly offset by positive mix in the industrial end market.

Ship tons were 640,400, a decrease of 29 percent from the prior year given the lower demand environment in 2020.

Manufacturing costs were favorable compared with 2019 primarily as a result of significant cost reduction actions, partially offset by the unfavorable impact of weak demand on production levels and lower melt utilization.

As for an outlook, the company said that given the extent and uncertainty of the impact of COVID-19 on the economy and TimkenSteel's customers, the company is not providing quantitative earnings guidance for the first quarter of 2021. However, the company noted it is encouraged by recent improvements in automotive and industrial end market demand.

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