Steel Mills
Dearborn Acquisition Boosts AK Steel Earnings
Written by Sandy Williams
November 4, 2014
AK Steel reported a net loss of $7.2 million for the third quarter of 2013 due to one-time costs associated with the acquisition of Severstal Dearborn. Excluding the acquisition related costs, AK Steel’s adjusted net income was $16.4 million.
Net sales were $1.59 billion on shipments of 1,462,900 tons. Shipments increased from 1,242,400 tons in Q3 2013 and 1,397,500 tons in Q2 2014 due to the addition of Dearborn and higher shipments of steel to the automotive and manufacturing markets. Steel shipments increased across all product categories on a year-over-year basis.
Average selling price decreased slightly from second quarter to $1,089 per ton. Costs of products sold were higher due to the Dearborn acquisition and an unplanned maintenance outage at the Ashland Works blast furnace. The company incurred costs of $23.2 million for the Ashland outage and $1.1 million for planned outages in third quarter.
“AK Steel’s third quarter financial performance exceeded our expectations,” said James L. Wainscott, Chairman, President and CEO of AK Steel. “Our continuing trend of posting adjusted net income provides us with a solid foundation for future growth in earnings and cash flow.”
Results for third quarter and the nine months ending September 30, 2014 include net sales of $90 million and operating profit of $2.1 million from the Dearborn acquisition.
The fourth quarter outlook will be discussed in the company earnings call but results are expected to be impacted by a planned outage at Ashland Works. The maintenance outage, which began in late October, includes a reline of the blast furnace hearth and will last approximately 28 days.
Sandy Williams
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