April 19, 2015
AK Steel Posts First-Quarter Loss
AK Steel, West Chester, Ohio, reported a net loss of $306 million during its first quarter. Most of the loss was due to a $256.3 million impairment charge related to its Magnetation LLC iron ore pellet joint venture. The steelmaker reported net sales of $1.75 billion, a 26.6 percent increase from the same quarter in 2014, but 14.2 percent behind the fourth quarter. The sales gain was primarily due to the company’s 2014 acquisition of Severstal’s Dearborn, Mich., operation.
“Shipments and selling prices in the carbon steel spot market were significantly impacted during the first quarter by the tidal wave of what we believe were unfairly traded foreign steel imports,” said James L. Wainscott, chairman, president and CEO of AK Steel during the company’s quarterly conference call with investors and analysts. “Despite the negative effects of imports on AK Steel’s results, the company experienced strong sales in automotive markets and generated positive adjusted EBITDA of $57.5 million.”
The company totaled shipments of 1.75 million tons, a 38.7 percent increase from the same quarter in 2014, but 12.9 percent behind the previous quarter. The company’s average selling price of $999 per ton was up from the prior quarter, but 9 percent below the same quarter in 2014. The increase in average selling price was the result of a richer product mix and a higher percentage of value-added shipments.
Carbon steel spot market selling prices declined throughout the first quarter, which AK Steel attributes to increased imports. The lower carbon steel spot market selling prices, combined with the higher proportion of hot-rolled coil shipments in the overall sales mix following the Dearborn acquisition, resulted in the lower selling price compared to first-quarter 2014.