Stelco Q2'24 earnings slip over the year

The Hamilton, Ontario-based company reported second quarter net income of CAD$67 million (USD$48.7 million). While that’s a slight increase compared to the first three months of the year — CAD$63 million (USD$45.8 million) — it’s a 43% drop compared to a year ago, when the company saw net earnings of CAD$177 million (USD$85 million).

Stelco attributed the year-over-year (y/y) drop to several factors: a CAD$61 million decrease in operating income, CAD$10 million change in finance income and other losses, and CAD$3 million increase in finance costs.

The company is in the process of being acquired by Cleveland-Cliffs in a deal valued at USD$2.5 billion (CA$3.4 billion). The deal is expected to close in the fourth quarter.

Alan Kestenbaum, executive chairman and CEO, noted that Stelco led its reporting peers by generating a 21% Adjusted EBITDA margin, a position it has held for 11 of the past 15 quarters.

“This continued strong level of performance is one of the factors that attracted the interest of Cleveland-Cliffs, and we are working hard to continue delivering results, while also working towards the successful completion of the transaction announced on July 15th,” Kestenbaum said in a press release.

Revenue dropped 15% to CAD $716 million (USD$520.7 million) y/y in Q2’24, primarily due to an 11% decrease in average selling price per net ton and a 3% decrease in shipping volume, according to the company

The average selling price of Stelco’s steel products fell from $1,217 per short ton (st) in Q2’23 to $1,085/st in Q2 ’24. Shipping volume dropped 19,000 st to 634,000 nt over the year.