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Dofasco reports strong second quarter

Dofasco Inc. announced this morning second-quarter earnings of $66.9 million or 89 cents a share, almost tripling its performance during the same quarter last year.
Dofasco

Dofasco Inc. announced this morning second-quarter earnings of $66.9 million or 89 cents a share, almost tripling its performance during the same quarter last year.

The announcement comes on the heels of Stelco's announcement yesterday of second-quarter earnings of $5 million or two cents a share, and Slater Steel's revelation today that it made $3.3 million or 22 cents a share over the same period.

Algoma Steel will announce its second-quarter results next Wednesday.

Dofasco Inc.

Dofasco reported that shipments from its Hamilton steel operation during the quarter set an all-time record of 1,114,000 tons, up 143,000 tons from the same period last year.

Higher North American steel prices pushed up the average revenue realized per ton of steel shipped from Hamilton to approximately $15 higher than the same quarter of 2001.

Average cost per ton improved by more than $25, the company reported, mostly because of increased volumes and the ongoing benefits of cost-reduction initiatives started last year.

Benchmarking study

Commenting today on the quarter, Dofasco Chairman and Chief Executive Officer John Mayberry pointed out that a recent benchmarking study by industry analyst World Steel Dynamics Inc. included Dofasco among just 13 global steelmakers considered world-class.

Dofasco was the only Canadian firm in the group, and one of just three North American steelmakers so recognized, he said. Slater Steel

Slater Steel, a specialty steel producer with mini mills in Fort Wayne, Indiana, Hamilton and Welland, Ontario and Sorel-Tracy, Quebec, reported today that its second-quarter earnings per share dropped nine cents from the same period last year.

"Continuing operations consumed $19.4 million of cash during the second quarter of 2002, primarily as a result of an inventory build in preparation for scheduled shutdowns and in anticipation of higher summer power costs, as well as contingency planning related to contract negotiations at Fort Wayne Specialty Alloys," the company said in a written statement.

Work stoppage

"Proceeds from the sale of Renown Steel, together with the division's cash flow from operations, provided cash flow of $23.4 million. In the comparable quarter in 2001, cash flow generated from operating activities was $35.3 million," Slater reported.

"The hourly workers at Fort Wayne Specialty Alloys commenced a work stoppage on July 18, 2002. The workers had been working without an agreement since the expiry of their collective agreement, May 19, 2002. Notwithstanding the uncertainty associated with the work stoppage, the division is continuing to ship product to ensure that customer needs are met." Stelco Inc.

Stelco's quarterly profit, the first reported by the ailing steelmaker in two years, reflects improved market conditions, said Jim Alfano, president and chief executive officer.

"The timely settlement of labour agreements at Hilton Works and Stelco-McMaster Ltée, both of which expire July 31, 2002, is required to participate in this market improvement," Alfano said.

Steelworkers Local 1005 and Stelco's Hilton Works discontinued discussions to reach an early agreement on April 29, then resumed talks on June 17.

Local 1005 officials considered midnight tonight (Wednesday) to be the actual strike deadline, because of a requirement that there be a one-week "cooling-off" period between any tentative agreement and a ratification vote.

Algoma Steel Inc.

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