April 27, 2016

AK Steel Cuts Losses

AK Steel reported a net loss of $13.6 million in the first quarter, a big improvement from the $306.3 million loss posted in the same quarter of 2015. The first-quarter loss was also a 90.8 percent improvement from the prior quarter. AK Steel’s net sales totaled $1.5 billion, a decline of 13.3 percent from first-quarter 2015 and a dip of 1.5 percent from the prior quarter.

"We achieved significant improvement from a year ago as we made the strategic decision to reduce our exposure to commodity spot markets, optimize our footprint and focus on higher value products," said Roger K. Newport, AK Steel’s CEO, during the company’s quarterly conference call with investors and analysts. "As a result of these actions, our continuous emphasis on operational improvements and relentless attention to cost management, our adjusted EBITDA improved significantly compared to a year ago."

Shipments of 1.7 million tons in the quarter were 5 percent lower than in first-quarter 2015, reflecting the company's strategic decision to reduce exposure to commodity products. Shipments of hot-rolled carbon steel products, most of which were sold into the commodity spot market, declined 34 percent from a year ago. Partially offsetting this decline was a 7 percent increase in higher-value coated products that are sold mostly to the automotive market. The company set a quarterly record for shipments to the auto industry, both in carbon and stainless chrome products. Auto represented about 63 percent of the company’s total shipments during the quarter.

The company's adjusted EBITDA increased 41 percent to $81.1 million in the first quarter, principally due to a better product mix, operational improvements, continuous focus on reducing costs and lower raw material and energy costs, executives said.

In March, the company completed the final phase of a capital project at its Butler Works facility that will expand production capabilities of grain-oriented electrical steel products by 5 percent. AK Steel executives say the steady growth of the housing market, combined with new transformer efficiency standards that went into effect at the start of the year, make them optimistic about the outlook for GOES products.


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Monday, October 23, 2017