The Hamilton-based steel manufacturer recently released its third quarter results. Photo credit: LinkedIn/Stelco
Stelco Holdings Inc. released its quarter three financials on November 15, reporting net third-quarter earnings down 74 per cent year-over-year with factors such as lower steel prices and inflation driving the decline.
The financial results were for the quarter ending September 30, 2022.
Earnings were down to $158 million or $2.33 per diluted share. Revenue for the quarter was also down 38 per cent year-over-year. The revenue decrease is attributed to a 36 per cent decline in average selling price per net ton, lower shipping volumes, and lower non-steel sales.
Alan Kestenbaum, Executive Chairman and Chief Executive Officer of Stelco, said that “despite market headwinds driven by cost inflation and a further deterioration in steel pricing trends, Stelco was able to increase our volume of shipments over the previous quarter and take full advantage of our low-cost structural advantage to again report strong Adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization].”
“The third quarter saw Stelco capitalize on market opportunities and maintain its position for the seventh consecutive quarter as the North American industry leader,” he continued.
Kestenbaum also announced that because of Stelco’s “continued success” it will be rewarding shareholders with “an additional $165 million of capital… through a $3 per share special dividend this quarter.”
“We continue to lead the industry in return of capital to shareholders as a percentage of our market capitalization, having returned $1.8 billion since we went public in 2017,” he added.
However, Chief Financial Officer Paul Scherzer reiterated that the “very challenging market conditions” that are currently present are expected to extend into the fourth quarter.
Scherzer made an additional announcement that the steel manufacturer will be increasing its quarterly dividend by 40 per cent to $0.42 a share.
“Our balance sheet remains strong, with a significant cash balance that even after recent buybacks remains in excess of $1 billion, and our business is well positioned to continue to make the necessary investments to ensure our long-term viability,” concluded Scherzer.
Stelco Holdings Inc. is the 100 per cent owner of Stelco Inc, the operating company. Stelco Holdings Inc. is known as a “low-cost integrated and independent steelmaker with one of the newest and most technologically advanced integrated steelmaking facilities in North America.”
Stelco is based in Hamilton, with a facility at Hamilton Harbour and another facility on the north shore of Lake Erie in Nanticoke, Ontario. They employ approximately 2,200 people. Stelco produces “flat-rolled value-added steels, including premium-quality coated, cold-rolled and hot-rolled steel products, as well as pig iron and metallurgical coke.”
Based in Hamilton, Ontario, Kevin Geenen reaches hundreds of thousands of people monthly on social media. He is a regular contributor with The Hamilton Independent and has been published in The Hamilton Spectator, Stoney Creek News, and Bay Observer. He has also been a segment host with Cable 14 Hamilton. He is known for Hamilton Neighbourhood Watch crime updates and no-nonsense news graphics. In 2017, he received the Chancellor Full Tuition Scholarship from the University of Ottawa and later graduated with a Bachelor of Arts. He also received the Governor General’s Academic Medal from Governor General David Johnston and formerly worked in a non-partisan role on Parliament Hill in Ottawa. He is currently employed as an Office Administrator at RE/MAX Escarpment. His journalistic work is independent of his other positions.
Based in Hamilton, he reaches hundreds of thousands of people monthly on Facebook, Instagram, TikTok, and Twitter. He has been published in The Hamilton Spectator, Stoney Creek News, and Bay Observer. He has also been a segment host with Cable 14 Hamilton. In 2017, he received the Chancellor Full Tuition Scholarship from the University of Ottawa (BA, 2022). He has also received the Governor General’s Academic Medal. He formerly worked in a non-partisan role on Parliament Hill in Ottawa.
