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Essar Steel Algoma reports third quarter loss

Thursday, February 13, 2014   by: SooToday.com Staff

NEWS RELEASE

ESSAR STEEL ALGOMA

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SAULT STE. MARIE, ON - Essar Steel Algoma Inc. reported today an EBITDA loss of $8.0 million for the three month period ended December 31, 2013, compared to positive EBITDA of $19.3 million for the same period a year ago. 

The loss this quarter reflects a 9.9% decline in shipment volume compared to the same period last year, coupled with increased fuel and utilities costs. 

EBITDA is a non-GAAP measure of profitability, used by management as an indicator of the operational health of the business.  The net loss for the quarter was $38.6 million compared to a net loss of $25.1 million for the same period a year ago.

The early onset of winter and persistent severe weather conditions hampered inbound raw materials and production for the quarter resulting in steel shipments of 590,837 tons, down substantially as compared to the previous year and the prior two quarters of this fiscal year. 

Average realized sales prices improved in the quarter by 3.1% over last year's comparable period, and by 4.3% over last quarter.

Essar Steel Algoma Chief Executive Officer Kalyan Ghosh commented on the quarter's results, "Funding relief for our defined benefit pension plans was an important milestone this quarter, providing greater predictability and more sustainable payment terms.  We are encouraged by improving macro economic indicators for 2014 as demonstrated in recent increases to hot rolled coil pricing and a significant improvement in the pension solvency position. In the months ahead we expect reduced costs as benefits from our new iron ore contract materialize.  When combined with the recent strategic additions to our management team and plans to improve productivity by a further 10-15% we are confident in our ability to realize a further $50 per ton cost reduction over the coming quarters."

A member of the Essar Group, Essar Steel Algoma Inc. is based in Sault Ste. Marie, Ontario. 

As a fully integrated steel producer, the Company derives its revenues primarily from the manufacture and sale of hot and cold rolled steel products including sheet and plate.

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Comments
19
Note: Comments that appear on the site are not the opinion of SooToday.com. If you see an abusive post, please click the link beside the post to report it.
steelworker 2/14/2014 2:05:37 AM Report

Buh-bye.
mpa 2/14/2014 6:28:22 AM Report

Wow, isnt that amazing. Check out this link about Dofasco. This is a part of the article.

Strong year-end numbers

ArcelorMittal Dofasco also announce this week that it had “its best overall performance” and highest employee performance payout since 2004.

Isnt it amazing that Essar is losing money but they are in the same market as Mittal.. or are they?

http://www.cbc.ca/news/canada/hamilton/news/arcelormittal-dofasco-to-spend-87m-on-coke-plant-upgrades-1.2529691
zardoz 2/14/2014 7:16:00 AM Report

Essar never lost any money...they just didnt make as much as they "hoped" they would.
Wisenheimer 2/14/2014 8:07:14 AM Report

Awkward!
Remembering 2/14/2014 8:44:06 AM Report

More of an excuse not to pay there bills
ChrisTee 2/14/2014 8:48:54 AM Report

Shut that place down
Dictionary 2/14/2014 11:07:36 AM Report

Ha... Is productivity down since they kicked out all the professional tradesmen in favour of S+T's non-union double dippers? Big surprise.
MoSteel 2/14/2014 11:36:35 AM Report

Chris tee why do you want to see almost 3000 people out of good paying careers. You must've had a traumatic childhood, or you you have tried to get into essar, but you can not! Either way I'll pray for you!
michebuck 2/14/2014 11:59:17 AM Report

I think Chriss tee would be singing a different song if essar did close .... This town would be a ghost town and a lot more business would then close.... Chris where would you work when all the mcdonalds and call centres close.... Lol
blackhawkman 2/14/2014 12:26:26 PM Report

over the yrs the steel industry has had it's ups & downs, is essar really loosing money or hiding money , i do not trust these owners , feel for the people that work there, hopefully everything will be ok! WORK SAFE
Dead End Kid 2/14/2014 12:47:42 PM Report

I agree black, this is a company that will never paint a rosy picture even when times are decent because they are afraid of union demands when the going gets good. You don't have to be a rocket scientist to figure that one out.

Chris Tee I hope you were trolling if not I really don't know how to respond to the statement that you made.
Koolaid 2/14/2014 1:40:55 PM Report

I heard Essar is laying off 1000 employees. So all the fast food places and call centers will be full to capacity, because non of the workers at Essar have any other skills.
MoSteel 2/14/2014 4:24:56 PM Report

Thats pretty funny koolaid considering my whole crew has a college or university education. I also know many people with an education that are working at McDonald's or call centers!
J_B 2/14/2014 4:39:32 PM Report

Good excuse to cut pension payments to all the guys and girls who sweat blood in there over the years. And what about the guys who paid into a pension plan for 35 years and died of cancer before they could collect a cent?
michebuck 2/14/2014 5:28:53 PM Report

Koolaid makes that comment as he/she probably sits at home on their fat a$s all day on the computer collecting welfair while the essar employees and other working citizens pay for it!!
frnlak 2/15/2014 11:31:28 AM Report

dicktionary...The trades people working for S&T ARE the pensioned professional trades people from Essar and I am happy to say that I am one. But on another note i have noticed that safety is very lacking in the steel mill and the place is a total disaster. No salt for ice, no roads plowed for emergency response, no parts, etc. That is one of the main reasons pensioned trades are hired, for the safety aspect. And we know how to scrounge. But the enviornmental part is disgusting to say the least.
Jasta 2/15/2014 11:51:34 AM Report

All big businesses predict what they will make in the up coming year...say, Ok next year i'm going to make 20 billion dollars....Even if they make a profit, the company will say they had a loss because of the prediction..I say stop predicting and be real!!!
judoka 2/15/2014 1:08:15 PM Report

I know they are one of the worst companies to pay their bills. It makes it hard on the suppliers to say the least. Just wondering where all this is going to lead? Keep hearing rumors, but who knows.
sootodayreader 2/16/2014 1:15:54 PM Report

Sell your home now before it's too late. Home prices returning to 2002 levels.
Comments
19
Note: Comments that appear on the site are not the opinion of SooToday.com. If you see an abusive post, please click the link beside the post to report it.
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