International Steel Mills

Stelco swings to a Q4 loss but sees better margins ahead

February 21, 2024

Stelco Holdings Inc.

Fourth quarter ended Dec. 31	2023	2022	% Change
Net sales	$613	$674	-9%
Net earnings (loss)	($25)	$23	-209%
Per diluted share	($0.45)	$0.39	-215%
Twelve months ended Dec. 31
Net sales	$2,917	$3,463	-16%
Net earnings (loss)	$149	$997	-85%
Per diluted share	$2.70	$14.64	-82%

(in millions of Canadian dollars except per share)

Canadian steelmaker Stelco swung to a loss in the fourth quarter as revenue declined due to decreased shipping volume and average selling prices.

The Hamilton, Ontario-based company reported a net loss of Canadian $25 million (-US$18.5 million) in Q4’23 vs. net income of C$23 million a year earlier on revenue that fell 9% to C$613 million (US$454.1 million).

“Our fourth-quarter results were down over the previous quarter, but we do expect improved margins in Q1 and into Q2’24, as we begin to realize the higher market pricing that we saw in the latter part of 2023,” Alan Kestenbaum, executive chairman and CEO, said.

He made the comments in a statement released after market close on Wednesday, adding that the company remains “optimistic that market demand will stay strong.”

Stelco reported a 9% year-over-year drop in shipping volume in Q4’23 to 609,000 short tons (st). Meanwhile, the company logged a 2% decrease in average selling price per short ton for steel products to $941 in the same comparison.

Comparing it to Q3’23, CFO Paul Scherzer said, “Our average selling price declined 13% quarter over quarter which, combined with a scheduled maintenance outage that had an impact on our shipments for the fourth quarter, led to a decline in adjusted Ebitda to C$51 million and adjusted net income of C$9 million.”

He continued: “Entering Q1’24, we anticipate a return to shipping volume of approximately 625,000 to 675,000 st and an improvement in adjusted Ebitda due to the realization of more favorable pricing witnessed through much of the fourth quarter.”

A breakdown of Stelco’s shipments is below.

Ethan Bernard

Ethan Bernard is a reporter and editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.