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Stelco Holdings Inc. is listed on the TSX under the symbol "STLC"

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Stelco reports first quarter results

    HAMILTON, ON, April 30 /CNW/ - Stelco Inc. (TSX:STE) ("Stelco" or the
"Corporation") today reported EBITDA(*) of $13 million and a loss before income
tax of $35 million for the first quarter ended March 31, 2007, a substantial
improvement over the negative $82 million EBITDA(*) and $145 million loss before
income tax reported in the fourth quarter 2006.First Quarter Highlights

    -  Lake Erie Steel achieved a record monthly production during the
       quarter following its successful expansion.

    -  Shipments increased to 922,000 tons and semi-finished steel production
       increased to 1,100,000 tons.

    -  Net sales revenue for the quarter ended March 31, 2007 was
       $609 million compared to $472 million for the quarter ended
       December 31, 2006.

    -  The Corporation's capital structure has been enhanced - the
       Corporation's asset based revolving credit facility was amended on
       enhanced terms and maturity extended to 2012, and subsequent to the
       quarter end a commitment letter was entered into to replace the
       existing revolving term loan credit facility on more favourable terms.Operations

    Hamilton Steel continued to incur significant losses during the first
quarter, offsetting the profitability of Lake Erie Steel and HLE Mining. As
previously disclosed, the 56" hot strip mill at Hamilton Steel, which has
operated since 1937, will be closed in May 2007 due to its high cost of
production and limited support from the marketplace. The 56" mill closure is
expected to reduce employment levels by 350 people at Hamilton, and is a
significant step toward transforming Hamilton Steel to become a profitable
steel manufacturer. The expanded capacity at Lake Erie Steel, in combination
with the reduction in fixed costs at Hamilton Steel, is expected to improve
Stelco's overall efficiency, product quality, and operating costs.
    Commenting on the results, Stelco's President and Chief Executive
Officer, Mr. Rodney Mott stated, "We have positioned Stelco to react quickly
to the changing marketplace. Our ramp up in production and shipments following
our Lake Erie expansion and Hamilton blast furnace upgrade has been


    The Corporation amended and extended its $600 million asset based
revolving credit facility on March 23, 2007. These amendments include
extending the term of the facility from 2008 to 2012, increasing the
availability under the facility, and providing an overall reduction in
financing costs. In addition, on April 9, 2007, the Corporation entered into a
commitment letter with GE Corporate Lending Canada relating to a proposed
refinancing of Stelco's existing revolving term loan with a fully drawn U.S.
dollar facility in an amount equivalent to $275 million Canadian, having a
term of six years. The new facility would have significantly lower interest
rate and fees compared to Stelco's existing revolving term loan. The
completion of the refinancing is subject to a number of conditions which must
be satisfied no later than May 11, 2007. These financing initiatives will
provide a more favourable long-term debt structure, which is expected to
reduce financing costs. Stelco will continue to pursue initiatives to enhance
its capital structure.


    Commenting on the second quarter, Mr. Mott said, "With our continued
strong production and shipping performance and the apparent strength of the
market, we expect improved operating results for the second quarter. High
shipping levels are expected throughout the quarter and previously announced
price increases will be realized.
    "Our Lake Erie Steel operation is now positioned as one of the industry's
most competitive, and will enable us to expand our market position. We will
continue to pursue initiatives to make Hamilton Steel a profitable operation,
and a further review of its facilities and cost structure is underway,"
commented Mr. Mott.

    Stelco's financial and operational summary (unaudited), as well as its
consolidated statements of financial position and cash flow summary
(unaudited), are attached. These materials should be reviewed in conjunction
with the Corporation's unaudited interim financial statements, including the
notes thereto, and the related management's discussion and analysis, a copy of
which can be viewed on the Corporation's Web site at or on SEDAR
at*)  EBIDTA is a non-Canadian GAAP measure which may not be comparable to
         measures used by other companies. Please refer to the note regarding
         Non-GAAP Financial Measures in the accompanying financial and
         operational summary of the Corporation.Conference call

    The Corporation will conduct a conference call on first quarter results
on Tuesday, May 1 at 11:00 am EDT. The webcast will be available on Stelco's
Web site at Please choose "Investor Centre" and select
"Webcasts". Please log in at least 15 minutes prior to the call.

    About Stelco

    Stelco is one of Canada's largest steel companies. It is focused on its
two Ontario-based integrated steel businesses located in Hamilton and in
Nanticoke. These operations produce high quality value-added hot rolled, cold
rolled, coated sheet and bar products. To learn more about Stelco and its
businesses, please refer to our Web site at


    This press release contains "forward-looking information" that is based
on Stelco's expectations, estimates and projections as of the date of this
press release or as of the date which such information is identified to be
given. This forward-looking information includes, among other things, factors
relating to the business, financial position, operations and prospects of
Stelco, including: Stelco's strategies and plans to reduce costs and the
anticipated outcome of such strategies and plans; anticipated productivity
levels and profitability; labour matters related to Stelco's predominantly
unionized workforce; pension matters; consolidation in the steel industry;
Stelco's energy and raw material costs and the availability of such materials;
the volatility of selling prices for steel; international trade matters,
including increases in steel imports into Canada; employee matters, including
staffing levels, the retention of the skills and knowledge of Stelco's
employees and the ability to attract and retain new employees; changes to
environmental laws and regulations concerned with, among other things,
emissions into the air, discharges to water or land, noise control and the
generation, handling, storage, transportation and disposal of toxic
substances; new technological developments and Stelco's ability to make
capital expenditures to maintain and enhance its technological ability;
development of new products; planned capital expenditures; and currency
fluctuations in the US dollar and their impact on the Corporation's US dollar
denominated long-term debt steel pricing, and costs. Often, but not always,
forward-looking information can be identified by the use of words and phrases
such as "plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases or states
that certain actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved.
    Forward-looking information involves known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Stelco to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking information. Actual results, performance and achievements are
likely to differ, and may differ materially, from those expressed or implied
by the forward-looking information contained herein. Such forward-looking
information is based on a number of assumptions which may prove to be
incorrect, including, but not limited to: exchange rates, energy and other
anticipated and unanticipated costs; pension contributions and expenses; the
supply and demand for, deliveries of, and the level and volatility of prices
of, steel and raw materials; the continued availability of financing on
appropriate terms; market competition; the impact on Stelco of various
environmental regulations and initiatives; and Stelco's ongoing relations with
its employees and staffing levels. While Stelco anticipates that subsequent
events and developments may cause Stelco's views to change, Stelco
specifically disclaims any obligation to update this forward-looking
information. This forward-looking information should not be relied upon as
representing Stelco's views as of any date subsequent to the date of this
press release.Stelco Inc.
    Financial and Operational Summary

    ($ in millions, except as indicated (*))           Quarter 1,  Quarter 4,
     (unaudited)                                          2007        2006

    Net sales                                            $   609     $   472
    Costs                                                    596         554
    EBITDA (1)                                                13         (82)
    Amortization of property, plant, and equipment            31          30
    Amortization of intangible assets                          1           1
    Operating loss before the following:                     (19)       (113)
    Employee future benefits - workforce reduction costs       -           3
    Foreign exchange (gain) loss on long-term debt            (3)         11
    Interest on long-term debt                                 9           9
    Other interest - net                                      10           9
    Loss before income tax                                   (35)       (145)
    Income tax expense                                         4           -
    Net loss                                             $   (39)    $  (145)
      Average revenue per ton                         (*)$   661  (*)$   701
      Cost per ton                                    (*)$   646  (*)$   823
    Semi-finished steel production (thousands of
     net tons)                                             1,100         611
    Shipments (thousands of net tons)                        922         673

    (1)  Non-GAAP Financial Measures

    The financial information contained in this press release is presented in
    accordance with Canadian GAAP. Reference is also made to "EBITDA", which
    is a non-Canadian GAAP measure. "EBITDA" refers to operating earnings
    (losses) before interest, income taxes, amortization and other
    non-operating income and expenses such as workforce reduction costs,
    foreign exchange gains and losses on long-term debt. Information
    concerning EBITDA has been included in this press release because
    management considers it to be, and uses it as, a meaningful indicator for
    assessing the operating performance of the Corporation. EBITDA does not
    represent cash generated from operations as defined by Canadian GAAP and
    it is not necessarily indicative of cash available to fund cash needs.
    Non-Canadian GAAP earnings measures (such as EBITDA) do not have any
    standardized meaning and therefore the Corporation's use of EBITDA
    measures may not be comparable to measures used by other companies. A
    reconciliation to net loss, which is a Canadian GAAP measure, is
    presented above in the Financial and Operational Summary.

    Stelco Inc.
    Consolidated Statements of Financial Position

                                                           At          At
                                                        March 31 December 31
    (in millions) (unaudited)                             2007        2006

    Current assets
    Cash and cash equivalents                            $     8     $     -
    Accounts receivable                                      307         214
    Inventories                                              657         693
    Prepaid expenses                                          25          28
    Future income taxes                                       27          27
                                                           1,024         962
    Other assets

    Property, plant and equipment                          1,721       1,743
    Intangible assets                                         24           1
    Other                                                     19          32
                                                           1,764       1,776
    Total Assets                                         $ 2,788     $ 2,738
    Liabilities and Shareholders' Deficit

    Current liabilities
    Accounts payable and accrued                         $   223     $   220
    Income and other taxes                                     9           1
    Employee future benefits                                  58          58
    Pension liability                                         65          65
    Long-term debt due within one year                        13          13
                                                             368         357
    Other liabilities
    Employee future benefits                               1,257       1,254
    Pension liability                                        311         338
    Long-term debt                                           333         342
    Revolving term loans                                     488         383
    Future income taxes                                       89          88
    Asset retirement obligation                               25          24
                                                           2,503       2,429
    Total Liabilities                                      2,871       2,786
    Shareholders' Deficit
    Capital stock                                            149         149
    Contributed surplus                                        5           1
    Warrants                                                   3           3
    Retained deficit                                        (240)       (201)
    Total Shareholders' Deficit                              (83)        (48)
    Total Liabilities and Shareholders' Deficit          $ 2,788     $ 2,738

    Stelco Inc.
    Cash Flow Summary
                                                       Quarter 1,  Quarter 4,
    (in millions)                                         2007        2006

    Cash provided by (used for):
    Net loss                                             $   (39)    $  (145)
    Adjustments to net loss for items not affecting
     cash                                                      8          21
    Changes in operating elements of working capital         (47)        174
    Operating activities                                     (78)         50
    Investing activities                                      (9)        (21)
    Financing activities                                      95         (42)
    Net change in cash position                          $     8     $   (13)
    -------------------------------------------------------------------------%SEDAR: 00001549E

For further information:
For further information: Rodney B. Mott, President and Chief Executive
Officer, (905) 528-2511, Extension 2020