Dofasco posts excellent 2002 results despite maintenance shutdown
Hamilton, ON -- Record shipments, higher selling prices and very good operating results at Dofasco's Hamilton and G...
Hamilton, ON — Record shipments, higher selling prices and very good operating results at Dofasco’s Hamilton and Gallatin Steel facilities contributed to excellent earnings for Dofasco in 2002.
Before non-cash charges related to Quebec Cartier Mining Company (QCM), Dofasco’s joint venture iron ore mining operation, Dofasco earned $236.4 million or $3.14 per common share in 2002. Including the $113.6 million ($1.51 per share) QCM charges, Dofasco’s consolidated net income for the year ended December 31, 2002 was $122.8 million, or $1.63 per common share after deducting preferred share dividends.
Also, the company’s Hamilton operations shipped 1,004,000 tons in the fourth quarter, compared to 899,000 tons in the same period in 2001. Shipments were over one million tons for the third quarter in a row, despite maintenance shutdowns, the most significant of which was the oxygen steelmaking facility which was shut down for most of December to replace the steelmaking vessel.
Commenting on the results, John Mayberry, Dofasco’s chairman and chief executive officer said, “This performance represents a remarkable accomplishment and the reason we are so proud of Dofasco people across the organization. Their creativity and diligence in implementing our growth strategy allowed Dofasco to capitalize on improved market conditions and our own enhanced operating capabilities to significantly improve our results.”
Dofasco’s 2002 results include $6.9 million ($0.09 per share) in net income from restating the company’s results for the first three quarters of the year to reflect the impact of a change in the method used to account for relining blast furnaces.
Late in 2002, an Agreement in Principle was reached between QCM, Dofasco, CAEMI of Brazil, (QCM’s co-owner) and third parties to restructure QCM in a way that will reduce the ownership positions of Dofasco and CAEMI and limit their support of future mine development. The agreement is subject to various conditions being satisfied with QCM’s bankers and other stakeholders.
Dofasco’s Steel Operations segment, which includes the company’s Hamilton operations, reported income before income taxes of $313.8 million in 2002, compared to 2001’s pre-tax income of $128.0 million. In Hamilton, an excellent operating performance that reflected the benefits of the Hot Mill Improvement Program completed in 2001 resulted in record shipments.
Gallatin Steel, Dofasco’s joint venture steelmaking facility in Kentucky, reported record results in 2002, while QCM continued to post poor results in 2002.
Looking forward, Mayberry said, “The investments Dofasco has made in expanding, modernizing and improving the efficiency of our facilities, and in extending their reach, have enabled Dofasco to evolve into a truly North American supplier. They underscore the value of advanced technology in gaining market share, meeting customers’ demands and securing growth. With capital investment, internal innovation and strategic alliances that provide access to the newest technology, Dofasco’s most valuable resource — our people — are equipped to ensure the company’s sustainable growth in the future.”
Dofasco is a leading North American steel solutions provider. Product lines include hot rolled, cold rolled, galvanized, Extragal, Galvalume and tinplate flat rolled steels, as well as tubular products, laser welded blanks and Zyplex, a proprietary laminate. Dofasco’s wide range of steel products is sold to customers in the automotive, construction, energy, manufacturing, pipe and tube, appliance, packaging and steel distribution industries.