/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES/
First quarter 2018 highlights include:
- Revenue of $482 million, up
25% year-over-year
- Operating income increased 58% year-over-year to
$57 million
- Adjusted EBITDA of $70
million, up 9% year-over-year
- Company reaffirms Q2 2018 earnings estimates
- Company declares dividend of $0.10 per share with a record date of
May 15, 2018 and payment date of
May 18, 2018
HAMILTON, ON, May 2, 2018
/CNW/ - Stelco Holdings Inc. ("Stelco Holdings" or the
"Company"), (TSX: STLC), a low cost, integrated and
independent steelmaker with one of the newest and most
technologically advanced integrated steelmaking facilities in
North America, today announced
financial results of the Company and that of Stelco Inc.
("Stelco" or "Stelco Inc.") for the three months
ended March 31, 2018. Stelco Holdings
is the 100% owner of Stelco, the operating company.
Stelco Inc. Highlights:
Financial Summary:
|
|
|
|
|
|
|
(in millions, except
volume and per nt figures)
|
|
Q1 2018
|
Q1 2017
|
Change
|
Q4 2017
|
Change
|
Revenue
($)
|
|
482
|
386
|
25%
|
452
|
7%
|
Operating income
($)
|
|
57
|
36
|
58%
|
54
|
6%
|
Net income (loss)
($)
|
|
28
|
(17)
|
n/a
|
16
|
75%
|
Adjusted net income*
($)
|
|
49
|
8
|
513%
|
49
|
—%
|
Adjusted EBITDA*
($)
|
|
70
|
64
|
9%
|
69
|
1%
|
Average selling price
per nt* ($)
|
|
786
|
774
|
2%
|
764
|
3%
|
Adjusted EBITDA per
nt* ($)
|
|
114
|
128
|
(11)%
|
117
|
(3)%
|
Shipping volume* (in
thousands of nt)
|
|
613
|
499
|
23%
|
592
|
4%
|
* See "Non-IFRS
measures" for a description of Non-IFRS measures used in this Press
Release and "Non-IFRS Measures Reconciliation" below.
|
"The notable year-over-year and sequential improvements in our
financial results reflect the benefits of improved efficiency,
expanded volumes and higher steel prices, and we anticipate further
improvements in the second quarter in accordance with our
previously issued guidance," said Alan
Kestenbaum, the Company's Executive Chairman and Chief
Executive Officer. "Improving industry fundamentals and rising
demand for steel should continue to benefit Stelco in the second
quarter and beyond as we ship orders that were booked at
sequentially higher prices during the first quarter. In addition to
the rising tide from stronger industry conditions, we have achieved
a number of strategic initiatives that we expect will positively
impact our shipping volumes and margins on an ongoing basis,
including our investments in rail assets and enhancements to our
dock at Lake Erie Works, which are now in place and are expected to
improve our shipping volumes and reduce our shipping costs."
First Quarter Financial and Operational Highlights:
- Revenue increased 25% to $482
million in Q1 2018 from $386
million in Q1 2017, driven by a 23% increase in shipping
volumes and a 2% increase in average selling prices
-
- On a sequential basis, revenue increased 7% from $452 million in Q4 2017, driven by a 4% increase
in shipping volumes and a 3% increase in average selling
prices
- Operating income increased 58% to $57
million in Q1 2018 from $36
million in Q1 2017
-
- On a sequential basis, operating income increased 6% from
$54 million in the Q4 2017
- Adjusted EBITDA increased 9% to $70
million in Q1 2018, at the high end of the guidance range
provided on March 28, 2018, and
compared to $64 million in Q1
2017
-
- On a sequential basis, adjusted EBITDA increased 1% from
$69 million in Q4 2017
- Q1 2018 shipping volume equates to approximately a 2.5 million
nt (net tons) annual run rate, up 25% from fiscal 2017 shipping
volumes of 2 million nt
- Stelco Holdings (on a consolidated basis) ended Q1 '18 with
total liquidity of $499 million,
including $226 million in cash and
$273 million of revolver
capacity
- Subsequent to the end of the quarter, the Company announced
that Dr. Indira Samarasekera and Mr.
Jacob Lew had been appointed to its
Board of Directors, effective May 2,
2018.
First Quarter 2018 Financial Results:
Revenue for the quarter ended March 31,
2018 was $482 million, an
increase of $96 million, or 25%, from
revenue of $386 million in the first
quarter of 2017. The period-over-period revenue increase was due to
both higher shipping volumes and to a lesser extent higher average
selling prices. Shipping volumes increased from 499 thousand nt in
the first quarter of 2017 to 613 thousand nt in the first quarter
of 2018, a 23% increase. Average selling price in the first quarter
of 2018 was $786 per nt, a 2%
increase from the $774 per nt average
selling price in the first quarter of 2017.
Gross profit for the quarter increased by $22 million, from a gross profit of $46 million in the first quarter of 2017 to a
gross profit of $68 million in the
first quarter of 2018, primarily due to increased shipping volumes
partially offset by higher raw material costs for metallurgical
coal, iron ore, and scrap metal.
Selling, general and administrative (SG&A) expenses
increased approximately $1 million
period-over-period, from $10 million
in the first quarter of 2017 to $11
million in the first quarter of 2018. The increase was due
to professional fees and Bedrock management fees mostly offset by
lower costs associated with our shared service arrangement with
United States Steel Corporation.
Finance costs decreased by $34
million, or 68%, from $50
million in the first quarter of 2017 to $16 million in the first quarter of 2018,
primarily due to a $50 million
decrease in interest on loans and borrowings related to the
extinguishment of $1.8 billion of
debt through the CCAA process, partially offset by $13 million of accretion and remeasurement
expenses associated with our employee benefit commitment obligation
and $3 million related to the gross
impact period-over-period of foreign exchange translation on U.S.
dollar denominated working capital.
Net income for the quarter increased by $45 million, from a net loss of $17 million in the first quarter of 2017 to net
income of $28 million in the first
quarter of 2018. The period-over-period increase reflects improved
revenue and lower finance cost, offset by higher operating costs
due to increased volumes and increased raw material and SG&A
costs. Adjusted net income increased $41
million period-over-period, from adjusted net income of
$8 million in the first quarter of
2017 to adjusted net income of $49
million in the first quarter of 2018.
Adjusted EBITDA in the first quarter of 2018 totaled
$70 million, an increase of
$6 million from adjusted EBITDA of
$64 million in the first quarter of
2017. The period-over-period improvement reflects the increase in
revenue, partially offset by higher operating costs in connection
with volume increases, higher raw material costs and SG&A
expenses.
Summary of Net Tons Shipped by Product for Periods Ended
March 31 and the Period Ending
December 31, 2017:
(in thousands of
nt)
|
|
|
|
|
|
|
Tons Shipped by
Product
|
|
Q1 2018
|
Q1 2018
|
Change
|
Q4 2017
|
Change
|
Hot-rolled
|
|
491
|
340
|
44%
|
473
|
4%
|
Coated
|
|
84
|
121
|
(31)%
|
77
|
9%
|
Cold-rolled
|
|
15
|
14
|
7%
|
15
|
—%
|
Other
|
|
23
|
24
|
(4)%
|
27
|
(15)%
|
Total
|
|
613
|
499
|
23%
|
592
|
4%
|
Shipments by
Products (%)
|
|
|
|
|
|
|
Hot-rolled
|
|
80%
|
68%
|
|
80%
|
|
Coated
|
|
14%
|
24%
|
|
13%
|
|
Cold-rolled
|
|
2%
|
3%
|
|
3%
|
|
Other
|
|
4%
|
5%
|
|
5%
|
|
Total
|
|
100%
|
100%
|
|
100%
|
|
Stelco Holdings Highlights:
Stelco Holdings' consolidated statement of income for the three
months ended March 31, 2018, which
primarily includes Stelco's financial results for the period. The
following is a financial summary of Stelco Holdings' results for
the first quarter of 2018:
|
|
|
(in millions, except
volume and per nt figures)
|
|
Q1 2018
|
Revenue
($)
|
|
482
|
Operating income
($)
|
|
58
|
Net income
($)
|
|
29
|
Net income per share
($)
|
|
0.33
|
Adjusted net income*
($)
|
|
50
|
Adjusted net income
per share* ($)
|
|
0.56
|
Adjusted EBITDA*
($)
|
|
69
|
Average selling price
per nt* ($)
|
|
786
|
Adjusted EBITDA per
nt* ($)
|
|
113
|
Shipping volume* (in
thousands of nt)
|
|
613
|
* See "Non-IFRS
measures" for a description of Non-IFRS measures used in this Press
Release and "Non-IFRS Measures Reconciliation" below.
|
Stelco Holdings' SG&A expenses for the period includes
employee salary and benefits, enterprise resource planning ("ERP")
implementation expenses relating to the separation from USS and
professional, consulting and legal fees. The incremental SG&A
incurred by Stelco Holdings in the quarter of $1 million ($11
million of the Stelco Holdings' SG&A was incurred
directly by Stelco Inc.), relates to audit and legal fees,
including those related to the secondary offering, as well as
director fees, insurance costs, and regulatory fees.
Statement of Financial Position and Liquidity:
On a consolidated basis, Stelco Holdings ended Q1 2018 with
total liquidity of $499 million,
including cash of $226 million and
$273 million of revolver capacity
under the ABL credit facility (total ABL revolver capacity is
$375 million).
The following table shows selected information regarding the
Stelco Holdings consolidated balance sheet as at the noted
dates:
(millions of Canadian
dollars)
|
|
|
|
|
As at
|
|
|
March 31,
2018
|
December 31,
2017
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
|
226
|
250
|
Trade and other
receivables
|
|
|
214
|
204
|
Inventories
|
|
|
370
|
448
|
Total current
assets
|
|
|
830
|
932
|
Total
assets
|
|
|
1,121
|
1,223
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Trade and other
payables
|
|
|
199
|
309
|
Total current
liabilities
|
|
|
271
|
374
|
Total
liabilities
|
|
|
604
|
726
|
Total
equity
|
|
|
517
|
497
|
In addition to its sound liquidity position, Stelco Holdings and
its subsidiaries ended Q1 2018 with current assets of $830 million, which exceeded current liabilities
of $271 million by $559 million. Stelco Holdings and its
subsidiaries had no long-term debt as at December 31, 2017, and $331 million of employee benefit commitments.
Stelco Holdings consolidated equity totaled $517 million as at March
31, 2018.
Outlook
For the second quarter, Stelco is reaffirming its outlook for
Adjusted EBITDA in the range of $120
million to $150 million. For
our key assumptions relating to this outlook, refer to the "Key
Assumptions Underlying Our Q1 and Q2 Earnings Estimate" section of
the Company's news release dated March 28,
2018 available under the Company's profile on SEDAR at
www.sedar.com. Please also refer to the "Forward-Looking
Information" section of such new release and the "Forward-Looking
Information" section below.
Declaration of Dividend
Stelco's Board of Directors approved the payment of a quarterly
cash dividend of $0.10 per share
payable on May 18, 2018 to
shareholders of record as of the close of business on May 15, 2018. For purposes of the Income
Tax Act (Canada), the dividend
is an "eligible dividend".
Appointment of Independent Directors
Subsequent to the end of the first quarter, the Company
announced that Dr. Indira
Samarasekera and Mr. Jacob
Lew had been appointed to its Board of Directors, effective
May 2, 2018.
Dr. Indira V. Samarasekera is
internationally recognized as one of Canada's leading metallurgical engineers for
her groundbreaking work on process engineering of materials,
especially steel processing. Dr. Samarasekera served as the
12th President and Vice Chancellor of the University of Alberta, from 2005-2015, one of
Canada's most respected
research-intensive universities. She also served as
Vice-President Research at the University of
British Columbia from 2000-2005. She is currently a Senior
Advisor for Bennett Jones LLP and serves on the Board of Directors
of the Bank of Nova Scotia, Magna
International and TransCanada. She also serves on the boards of the
Asia-Pacific Foundation, the Rideau Hall Foundation, and the
selection panel for Canada's
outstanding CEO of the Year sponsored by Caldwell Partners and
Bennett Jones. Dr. Samarasekera was
appointed by the Prime Minister to serve as a Federal Member to the
Independent Advisory Board for Senate Appointments, until 2017.
Mr. Jacob Lew is a Partner at
Lindsay Goldberg LLC, and previously served as the United States Secretary of the Treasury
from February 2013 to January 2017. Secretary Lew had previously served
as White House Chief of Staff for President Obama, Director of the
Office of Management and Budget, a position he also held in
President Clinton's Cabinet from 1998 to 2001, and Deputy Secretary
of State for Management and Resources. Secretary Lew previously
served as Managing Director and Chief Operating Officer for two
different Citigroup business units, and Executive Vice President
and Chief Operating Officer of New York
University. Secretary Lew is a member of the Council on
Foreign Relations and the National Academy of Social Insurance. He
received his B.A. from Harvard
University and his J.D. from the Georgetown University Law Center.
Quarterly Results Conference Call
Stelco management will host a conference call to discuss its
results tomorrow, Thursday, May 3,
2018 at 9 a.m. EST. To access
the call, please dial 1-800-239-9838 (U.S. and Canada) or 1-323-794-25514 (international) and
reference conference ID 7089296. The conference call will also be
webcasted live on the Investor Relations section of Stelco's web
site at https://www.stelco.com/investors. A presentation that will
accompany the conference call will also be available on the website
prior to the conference call.
Following the conclusion of the live call, a replay of the
webcast will be available on the Investor Relations section of the
Company's website for at least 90 days. A telephonic replay of the
conference call will also be available from 12 p.m. ET on May 3,
2018 until 11:59 p.m. ET on
May 17, 2018 by dialing
1-844-512-2921 (United States) or
1-412-317-6671 (international) and using the pin number
7089296.
Consolidated Financial Statements and Management's Discussion
and Analysis
The Company's (including both Stelco Holdings Inc. and Stelco
Inc.) unaudited interim condensed consolidated financial statements
for the period ended March 31, 2018,
and Management's Discussion & Analysis thereon are available
under the Company's profile on SEDAR at www.sedar.com.
About Stelco
Stelco is a low cost, integrated and independent steelmaker with
one of the newest and most technologically advanced integrated
steelmaking facilities in North
America. Stelco produces flat-rolled value-added steels,
including premium-quality coated, cold-rolled and hot-rolled steel
products. With first-rate gauge, crown, and shape control, as well
as reliable uniformity of mechanical properties, our steel products
are supplied to customers in the construction, automotive and
energy industries across Canada
and the United States as well as
to a variety of steel services centres, which are regional
distributers of steel products.
Non-IFRS Measures
This news release refers to certain non-IFRS measures that are
not recognized under International Financial Reporting Standards
("IFRS") and do not have a standardized meaning prescribed by IFRS.
These measures are not recognized measures under IFRS, do not have
a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measures presented by other companies.
Rather, these measures are provided as additional information to
complement those IFRS measures by providing further understanding
of our results of operations from management's perspective.
Accordingly, these measures should not be considered in isolation
nor as a substitute for analysis of our financial information
reported under IFRS. We use non-IFRS measures including "adjusted
net income", "adjusted net income per share", ''adjusted EBITDA'',
''adjusted EBITDA per nt'', ''selling price per nt'', and
''shipping volume'' to provide supplemental measures of our
operating performance and thus highlight trends in our core
business that may not otherwise be apparent when relying solely on
IFRS financial measures. We also believe that securities analysts,
investors and other interested parties frequently use non-IFRS
measures in the evaluation of issuers. Our management uses these
non-IFRS financial measures to facilitate operating performance
comparisons from period-to- period, to prepare annual operating
budgets and forecasts, and drive performance through our management
compensation program. For a reconciliation of these non-IFRS
measures, refer to the Company's "Non- IFRS Measures
Reconciliation" section below. For a definition of these non-IFRS
measures, refer to the Company's MD&A for the period ended
March 31, 2018 available under the
Company's profile on SEDAR at www.sedar.com.
Forward-Looking Information
This release contains ''forward-looking information'' within the
meaning of applicable securities laws. Forward-looking information
may relate to our future outlook and anticipated events or results
and may include information regarding our financial position,
business strategy, growth strategy, budgets, operations, financial
results, taxes, dividend policy, plans and objectives of our
Company. Particularly, information regarding our expectations of
future results, performance, achievements, prospects or
opportunities is forward-looking information. In some cases,
forward-looking information can be identified by the use of
forward-looking terminology such as ''plans'', ''targets'',
''expects'' or ''does not expect'', ''is expected'', ''an
opportunity exists'', ''budget'', ''scheduled'', ''estimates'',
''outlook'', ''forecasts'', ''projection'', ''prospects'',
''strategy'', ''intends'', ''anticipates'', ''does not
anticipate'', ''believes'', or variations of such words and phrases
or state that certain actions, events or results ''may'',
''could'', ''would'', ''might'', ''will'', ''will be taken'',
''occur'' or ''be achieved''. In addition, any statements that
refer to expectations, intentions, projections or other
characterizations of future events or circumstances may be forward
looking statements. Forward-looking statements are not historical
facts but instead represent management's expectations, estimates
and projections regarding future events or circumstances. The
forward-looking statements contained herein are presented for the
purpose of assisting the holders of our securities and financial
analysts in understanding our financial position and results of
operations as at and for the periods ended on the dates presented,
as well as our financial performance objectives, vision and
strategic goals, and may not be appropriate for other purposes.
Forward-looking information in this news release includes our
advancement of strategic initiatives, the declaration of a dividend
and the estimate related to second quarter Adjusted EBITDA, a
non-IFRS measures (see "Non-IFRS Measures"). Undue reliance should
not be placed on forward-looking information. The forward-looking
information in this press release is based on our opinions,
estimates and assumptions in light of our experience and perception
of historical trends, current conditions and expected future
developments, as well as other factors that we currently believe
are appropriate and reasonable in the circumstances. Despite a
careful process to prepare and review the forward-looking
information, there can be no assurance that the underlying
opinions, estimates and assumptions will prove to be correct.
Certain assumptions in respect of our ability to source raw
materials and other inputs; our ability to supply to new customers
and markets; our ability to effectively manage costs; our ability
to attract and retain key personnel and skilled labour; our ability
to obtain and maintain existing financing on acceptable terms;
currency exchange and interest rates; the impact of competition;
changes in laws, rule, and regulations, including international
trade regulations; and growth in steel markets and industry trends,
as well as those set out in this press release, are material
factors made in preparing the forward-looking information and
management's expectations contained in this press release.
Such forward-looking information is subject to known and unknown
risks, uncertainties, assumptions and other factors that may cause
the actual results, level of activity, performance or achievements
to be materially different from those expressed or implied by such
forward-looking information, including: North American and global
steel overcapacity; imports and trade remedies; competition from
other producers, imports or alternative materials; and the
availability and cost of inputs placing downward pressure on steel
prices or increasing our costs; as well as those described in the
Company's annual information form and the Company's MD&A for
the period ended March 31, 2018
available under the Company's profile on SEDAR at
www.sedar.com.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly,
readers should not place undue reliance on forward looking
information, which speaks only as of the date made. The
forward-looking information contained in this press release
represents our expectations as of the date of this news release,
and are subject to change after such date. Stelco Holdings
disclaims any intention or obligation or undertaking to update
publicly or revise any forward-looking statements, whether written
or oral, whether as a result of new information, future events or
otherwise, except as required by law.
Selected Financial Information
The following includes financial information prepared by
management in accordance with IFRS. This financial information does
not contain all disclosures required by IFRS, and accordingly
should be read in conjunction with Stelco Holdings Inc.'s and
Stelco Inc.'s Consolidated Financial Statements and MD&A for
the period ended March 31, 2018,
which is available on the Company's website and on SEDAR.
Stelco
Inc.
|
|
|
|
|
Statement of
income (loss)
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
(millions of Canadian
dollars)
|
|
|
|
|
2018
|
|
2017
|
Revenue from sale of
goods
|
|
|
|
$
|
482
|
$
|
386
|
Cost of goods
sold
|
|
|
|
|
414
|
|
340
|
Gross profit
(loss)
|
|
|
|
|
68
|
|
46
|
Selling, general and
administrative expenses
|
|
|
|
|
11
|
|
10
|
Operating income
(loss)
|
|
|
|
|
57
|
|
36
|
Finance
costs
|
|
|
|
|
(16)
|
|
(50)
|
Finance and other
income (loss)
|
|
|
|
|
(10)
|
|
5
|
Restructuring
costs
|
|
|
|
|
(3)
|
|
(8)
|
Income (loss) before
income taxes
|
|
|
|
|
28
|
|
(17)
|
Income tax
expense
|
|
|
|
|
—
|
|
—
|
Net income (loss)
for the year
|
|
|
|
$
|
28
|
$
|
(17)
|
Stelco Holdings
Inc.
|
Consolidated
Statement of income and comprehensive income
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
(millions of
Canadian dollars)
|
|
|
|
March 31,
2018
|
|
|
|
|
|
Revenue from sale of
goods
|
|
|
$
|
482
|
Cost of goods
sold
|
|
|
|
412
|
Gross
profit
|
|
|
|
70
|
Selling, general and
administrative expenses
|
|
|
|
12
|
Operating
income
|
|
|
|
58
|
Finance and other
income (loss)
|
|
|
|
(10)
|
Finance
costs
|
|
|
|
(16)
|
Restructuring and
other costs
|
|
|
|
(3)
|
Income before
taxes
|
|
|
|
29
|
Income tax
expense
|
|
|
|
—
|
Income and
comprehensive income for the period
|
|
|
$
|
29
|
Stelco
Inc.
|
|
|
|
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
As at
|
|
|
|
March 31,
2018
|
December 31,
2017
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
$
|
35
|
$
|
45
|
|
Restricted
cash
|
|
|
|
11
|
12
|
|
Trade and other
receivables
|
|
|
|
214
|
203
|
|
Inventories
|
|
|
|
370
|
448
|
|
Prepaid
expenses
|
|
|
|
9
|
18
|
Total current
assets
|
|
|
|
$
|
639
|
$
|
726
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
|
303
|
305
|
|
Investment in joint
ventures
|
|
|
|
4
|
4
|
Total non-current
assets
|
|
|
|
$
|
307
|
$
|
309
|
Total
assets
|
|
|
|
$
|
946
|
$
|
1,035
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Trade and other
payables
|
|
|
|
$
|
205
|
$
|
310
|
|
Other
liabilities
|
|
|
|
30
|
33
|
|
Employee benefit
commitment
|
|
|
|
42
|
32
|
Total current
liabilities
|
|
|
|
$
|
277
|
$
|
375
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
Provisions
|
|
|
|
6
|
5
|
|
Pension
benefits
|
|
|
|
1
|
—
|
|
Other
liabilities
|
|
|
|
36
|
34
|
|
Employee benefit
commitment
|
|
|
|
289
|
312
|
Total non-current
liabilities
|
|
|
|
$
|
332
|
$
|
351
|
Total
liabilities
|
|
|
|
$
|
609
|
$
|
726
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Common
shares
|
|
|
|
2,325
|
2,325
|
|
Contributed
surplus
|
|
|
|
500
|
500
|
|
Retained
deficit
|
|
|
|
(2,488)
|
(2,516)
|
Total
equity
|
|
|
|
$
|
337
|
$
|
309
|
Total liabilities
and equity
|
|
|
|
$
|
946
|
$
|
1,035
|
Stelco Holdings
Inc.
|
|
|
|
Consolidated
Statement of financial position
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
As at
|
|
March 31,
2018
|
December 31,
2017
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
226
|
$
|
250
|
|
Restricted
cash
|
|
11
|
12
|
|
Trade and other
receivables
|
|
214
|
204
|
|
Inventories
|
|
370
|
448
|
|
Prepaid
expenses
|
|
9
|
18
|
Total current
assets
|
|
$
|
830
|
$
|
932
|
|
|
|
|
Non-current
assets
|
|
|
|
|
Property, plant and
equipment, net
|
|
279
|
279
|
|
Intangible
assets
|
|
7
|
7
|
|
Investment in joint
ventures
|
|
5
|
5
|
Total non-current
assets
|
|
$
|
291
|
$
|
291
|
Total
assets
|
|
$
|
1,121
|
$
|
1,223
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
|
Trade and other
payables
|
|
$
|
199
|
$
|
309
|
|
Other
liabilities
|
|
30
|
33
|
|
Employee benefit
commitment
|
|
42
|
32
|
Total current
liabilities
|
|
$
|
271
|
$
|
374
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
Provisions
|
|
6
|
5
|
|
Pension
benefits
|
|
1
|
—
|
|
Other
liabilities
|
|
37
|
35
|
|
Employee benefit
commitment
|
|
289
|
312
|
Total non-current
liabilities
|
|
$
|
333
|
$
|
352
|
Total
liabilities
|
|
$
|
604
|
$
|
726
|
|
|
|
|
EQUITY
|
|
|
|
|
Common
shares
|
|
512
|
512
|
|
Retained earnings
(deficit)
|
|
5
|
(15)
|
Total
equity
|
|
$
|
517
|
$
|
497
|
Total liabilities
and equity
|
|
$
|
1,121
|
$
|
1,223
|
Non-IFRS Measures Results
The following tables provides a reconciliation of net income
(loss) to adjusted net income (loss) for the periods indicated:
Stelco Inc.
(millions of Canadian
dollars, except where otherwise noted)
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
2018
|
|
2017
|
Net income
(loss)
|
|
$
|
28
|
$
|
(17)
|
Add
back/(Deduct):
|
|
|
|
|
|
|
Unrealized loss from
commodity-based swaps
|
|
|
10
|
|
—
|
|
Remeasurement of
employee benefit commitment 1
|
|
|
4
|
|
—
|
|
Separation costs
related to USS support services 2
|
|
|
4
|
|
4
|
|
Restructuring costs
3
|
|
|
3
|
|
8
|
|
Provision on pension
and other post-employment benefits 4
|
|
|
—
|
|
13
|
Adjusted net
income
|
|
$
|
49
|
$
|
8
|
1.
|
Remeasurement of
employee benefit commitment for change in the timing of estimated
cash flows and future funding requirements.
|
2.
|
Includes ERP
implementation costs associated with the process of separating from
USS, management fees and shared services arrangement
costs.
|
3.
|
Restructuring
expenses relates to the CCAA proceedings, which primarily included
legal fees, financial advisor fees, court-appointed monitor fees,
interim financing fees and other related restructuring expenses.
The Company implemented its CCAA plan on June 30, 2017.
|
4.
|
Represents difference
between total cash funding obligation for pensions and
OPEBs.
|
Stelco Holdings Inc.
(millions of Canadian
dollars, except where otherwise noted)
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
|
2018
|
Net
income
|
|
|
|
$
|
29
|
Add
back/(Deduct):
|
|
|
|
|
|
Unrealized loss from
commodity-based swaps
|
|
|
|
|
10
|
Remeasurement of
employee benefit commitment 1
|
|
|
|
|
4
|
Separation costs
related to USS support services 2
|
|
|
|
|
4
|
Restructuring costs
3
|
|
|
|
|
3
|
Adjusted net
income
|
|
|
|
$
|
50
|
1.
|
Remeasurement of
employee benefit commitment for change in the timing of estimated
cash flows and future funding requirements.
|
2.
|
Includes ERP
implementation costs associated with the process of separating from
USS, management fees and shared services arrangement
costs.
|
3.
|
Restructuring
expenses relates to the CCAA proceedings, which primarily included
legal fees, financial advisor fees, court-appointed monitor fees,
interim financing fees and other related restructuring expenses.
The Company implemented its CCAA plan on June 30, 2017.
|
The following tables provides a reconciliation of net income
(loss) to Adjusted EBITDA for the periods indicated:
Stelco Inc.
(millions of Canadian
dollars, except where otherwise noted)
|
|
|
|
|
Three months ended
March 31,
|
|
2018
|
|
2017
|
Net income
(loss)
|
$
|
28
|
$
|
(17)
|
Add
back/(Deduct):
|
|
|
|
|
|
Depreciation
|
|
9
|
|
7
|
|
Finance
costs
|
|
16
|
|
50
|
|
Finance
income
|
|
—
|
|
(1)
|
|
Unrealized loss from
commodity based swaps
|
|
10
|
|
—
|
|
Provision on pension
and other post-employment benefits 1
|
|
—
|
|
13
|
|
Separation costs
related to USS support services 2
|
|
4
|
|
4
|
|
Restructuring costs
3
|
|
3
|
|
8
|
Adjusted
EBITDA
|
$
|
70
|
$
|
64
|
Adjusted EBITDA as
a percentage of total revenue
|
|
15%
|
|
17%
|
1.
|
Represents difference
between total cash funding obligation for pensions and OPEBs and
amount already reflected in EBITDA.
|
2.
|
Includes ERP
implementation costs associated with the process of separating from
USS, management fees and shared services arrangement
costs.
|
3.
|
Restructuring
expenses relates to the CCAA proceedings, which primarily included
legal fees, financial advisor fees, court-appointed monitor fees,
interim financing fees and other related restructuring expenses.
The Company implemented its CCAA plan on June 30, 2017.
|
Stelco Holdings Inc.
(millions of Canadian
dollars, except where otherwise noted)
|
|
|
|
Three months ended
March 31,
|
|
|
2018
|
Net
income
|
|
$
|
29
|
Add
back/(Deduct):
|
|
|
|
Depreciation
|
|
|
7
|
Finance
costs
|
|
|
16
|
Unrealized loss from
commodity based swaps
|
|
|
10
|
Separation costs
related to USS support services1
|
|
|
4
|
Restructuring
costs2
|
|
|
3
|
Adjusted
EBITDA
|
|
$
|
69
|
Adjusted EBITDA as
a percentage of total revenue
|
|
|
14%
|
1.
|
Includes ERP
implementation costs associated with the process of separating from
USS, management fees and shared services arrangement
costs.
|
2.
|
Restructuring
expenses relates to the CCAA proceedings, which primarily included
legal fees, financial advisor fees, court-appointed monitor fees,
interim financing fees and other related restructuring expenses.
The Company implemented its CCAA plan on June 30, 2017.
|
Note: All dollar figures herein are Canadian dollars, unless
otherwise noted.
SOURCE Stelco