The steel maker went from a net loss of $159 million in 2020, to a net income of over $1.6 billion in 2021. Photo credit: Twitter/Stelco Canada
Earlier this week, Hamilton-based steel producer Stelco posted its year-end financials for 2021.
The company, which employs over 2,200 people across its two facilities in Hamilton and Nanticoke, finished the year with an adjusted net-income of over $1.6 billion.
“Today Stelco is reporting our most successful year on record, and I could not be prouder of our team for delivering these results,” said Executive Chairman and CEO Alan Kestenbaum in a statement Wednesday.
“Over the past four and a half years, we have invested strategically and remained tactically flexible in order to take full advantage of our industry leading low-cost position and capitalize on favourable market conditions.”
Stelco’s revenue in 2021 jumped 172 per cent from the previous year, topping $4.12 billion. According to the company, the massive revenue increase was primarily a result of rising steel prices and a 33 per cent increase in demand.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in 2021 totaled over $2 billion, up from a mere $75 million in 2020.
“We completed 2021 with over $2 billion of Adjusted EBITDA and an industry-leading Adjusted EBITDA margin of 50%. While we certainly benefited from exceptional price levels for much of the year, it is our low-cost structure and ability to drive revenue through to the bottom line that sets us apart from our North American competitors,” said Kestenbaum.
In operation since 1910, Stelco produces flat-rolled value-added steels, including premium coated, cold-rolled and hot-rolled steel products, as well as pig iron and metallurgical coke.
The company’s products are commonly supplied to automotive, construction and energy customers across Canada and the United States.
“Our success in 2021 was driven by the commitment of the entire Stelco team to maintaining our low-cost structure and driving shipments to capitalize on unprecedented market conditions,” said Stelco CFO Paul Scherzer. “While the outlook for 2022 is unclear, we expect that the foundation we have built through strategic investments over the past four years, and the continued commitment of our employees to continually and relentlessly focus on costs, will allow Stelco to remain the North American leader in steel industry profit margin.”
To combat lower pricing, inflationary pressures, and a reduction in demand in 2022, Kestenbaum said the company “will work even harder to further improve our cost structure where we can”.
“Our goal is to ensure that Stelco remains profitable through every point of the market cycle.”
