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

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Stelco Completes its Operational Improvement Program
Resulting Fourth Quarter loss will be $120-140 millionHAMILTON, ON, Feb. 7 /CNW/ - Stelco Inc. (TSX:STE) today announced that
it has completed the major components of the operational restructuring that it
commenced upon exiting from the CCAA process. This operational restructuring
had three key components:-   Productivity improvement initiatives and reduction in the labour
        force.

    -   Reducing production costs through workflow improvement.

    -   Optimizing capital projects.

    In order to complete this program, it was necessary to close certain
production facilities for a period of time during the fourth quarter. These
shutdowns coincided with a softening in demand for steel. The net result of
these initiatives is that Stelco expects to report a loss before income taxes
in the range of $120 million to $140 million for the fourth quarter ending
December 31, 2006.
    The closure of production facilities enabled the company to successfully
complete several strategic capital projects, including:

    -   the reline and upgrade of the blast furnace at the Hamilton plant to
        significantly increase throughput and to extend the interval for the
        next furnace reline to 2018; and

    -   the Phase II expansion of the Lake Erie hot strip mill, which is
        expected to increase throughput by 20% over previous levels.With these two major projects now complete, Stelco does not anticipate
any further significant mill outages in 2007.
    As mentioned above, fourth quarter results were also adversely impacted
by lower demand in the automotive and steel service centre sectors, which
contributed to a reduction in spot prices for steel and shipments during the
quarter. In addition, higher costs were incurred due to increases in the cost
of energy and certain raw materials.
    Mr. Rodney Mott, President and CEO stated that, "The economic outlook for
2007 appears positive and the demand for steel has improved markedly."
Shipment and semi-finished steel production in January improved significantly
over the respective monthly averages for the fourth quarter. January shipments
were 309,000 tons and semi-finished steel production was 380,000 tons, which
compares to fourth quarter monthly averages of 225,000 tons and 204,000 tons
respectively. Spot prices have also improved for January as compared to the
fourth quarter. Mr. Mott added that, "With these steps of our operational
restructuring program now complete we have significantly enhanced our
efficiency, reduced operating costs, and are poised to compete effectively in
this improving economic environment."
    The Corporation expects to release its annual results in early March
2007.

    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 www.stelco.com.

    CAUTION REGARDING FORWARD-LOOKING INFORMATION

    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: expected losses for the fourth quarter ending December 31,
2006; expected increase to throughput at Lake Erie; and no expected planned
significant mill outages. 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.

    %SEDAR: 00001549E



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

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