Algoma Steel expects improved results

Algoma Steel announced Tuesday that it lost $116 million during the fourth quarter of 2001, but the restructured company predicted better performance in future quarters as steel prices improve.

The shortfall, on sales of $212 million, amounted to a loss per share of $2.16.

The company's new board met for the first time Tuesday in Sault Ste. Marie and directors toured the local plant, chief executive officer Alexander Adam told institutional investors during a 4 p.m. conference call.

Glen Manchester, vice president for finance and administration, told the call that Algoma is expecting positive results in the first three months of 2002.

The company has reduced both its operating and interest costs. Most of the $80 million reduction in its operating costs is attributable to new collective agreements with its workers, Manchester said.

Operating levels are being increased cautiously as more orders come in, he said.

"Future financial results should improve substantially as the benefits of reduced interest and operating costs are realized," Adam and chairman Robert Milbourne said in a joint statement.

"Steel markets have improved which should result in higher prices and shipment levels in future quarters," the statement said.

The fourth-quarter loss resulted in part from weak steel demand attributable to the Sept. 11 attacks, as well as the usual December doldrums caused by temporary customer shutdowns.

But several North American steel plants have closed in recent months and prices will rise by $30 a ton in February for both plate and sheet products.

A further $30-a-ton increase for hot rolled sheet will take effect Apr. 1, the company announced Tuesday.

Algoma completed its restructuring and successfully emerged from protection under the Companies' Creditors Arrangement Act on Jan. 29.

Algoma's unaudited fourth-quarter results can be accessed at http://www.ccnnewswire.com/ccnnewswire/index1.html

To receive free, real-time updates of SooToday.com's exclusive coverage of local news, just send an Email with "SUBSCRIBE" in the subject line to [email protected].