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Stelco reports earnings growth in Q2, but warns lower prices will affect rest of year

Rolls of coiled coated steel are shown at Stelco before a visit by Global Affairs Minister Chrystia Freeland, in Hamilton on Friday, June 29, 2018. THE CANADIAN PRESS/Peter Power

HAMILTON — Stelco Holdings Inc. says its year-over-year earnings increased 53 per cent in the second quarter of 2022 to $554 million, or $7.67 per diluted share.

The Hamilton-based steelmaker attributed the increase partially to the $260 million in proceeds it received in the quarter from the sale and leaseback of its Hamilton land and buildings, as well as an increase in operating income and lower financing costs.

On an adjusted basis, Stelco says it earned $356 million in the second quarter, down from $383 million in the prior year's quarter.

The company's revenue was $1.037 billion for the quarter, up 13 per cent from the same period in 2021 and up 14 per cent from the first quarter of 2022.

Stelco says the benchmark North American steel price has declined by over 40 per cent since its late-April peak, and the company is also experiencing inflationary pressures on key inputs like natural gas, coal and alloys.

It says its third-quarter earnings are expected to be materially below the Q2 level on an adjusted basis, with further weakening expected in the fourth quarter.

This report by The Canadian Press was first published Aug. 10, 2022.

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The Canadian Press