The Stel Salaried Pensioners Organization wishes to thank The Hamilton Spectator for permission to post the following article published in the October 25, 2007 edition
Stelco posts Q3 profit of $38m
The Canadian Press
HAMILTON (Oct 25, 2007)
In its last earnings report as a
Canadian-owned company, Stelco Inc. reported yesterday a net profit of $38
million in the third quarter, reversing a loss of $25 million for the same
period a year ago.
That amounts to a profit of $1.26 per share
during this quarter, compared to a loss of 93 cents per share during the three
months ended Sept. 30, 2006, Stelco said after stock markets closed.
The gains were due in part to $5 million in
savings from job cuts and other streamlining and foreign exchange increases of
$36 million. Average revenue per ton of steel produced was $606 million, down
from last year's $719 million.
In August, Pittsburgh-based U.S. Steel Corp.
agreed to buy Stelco for $38.50 in cash per common share, or US$1.1 billion.
Stelco shareholders are slated to vote on the deal at a meeting in Toronto
tomorrow.
The acquisition is expected to close by the
end of the month.
In its earnings report, Stelco said its
financial improvement in profits "was largely driven by a significant
improvement in the cost structure resulting from the strategic and operational
restructuring initiatives over the past 18 months plus lower input costs,
offset by lower selling prices."
Since emerging from bankruptcy restructuring
nearly two years ago, Stelco cut costs, reduced debt and improved its
efficiency as it sought a potential bidder.
U.S. Steel outbid Russian steelmaker OAO
Severstal and emerged the winning bidder this summer.
The takeover by U.S. Steel is essentially a
done deal since it has already gotten approval by shareholders holding more
than 76 per cent of Stelco's outstanding shares, including Tricap Management
Ltd., Sunrise Partners LP and Appaloosa Management LP.
The proposed merger is the latest in a
series of steelmaker marriages occurring after several years of solid growth,
high prices and soaring demand from China, India and other rapidly growing
countries.
Other Canadian steelmakers purchased by
foreign companies in the past two years include:
* Ipsco Inc., a company that originated in
Regina and continues to operate there as well as in several U.S. states, was
purchased for US$7.7-billion by SSAB Svenskt Stal AB of Sweden.
* Algoma Steel Inc. of Sault Ste. Marie,
Ont., bought for $1.85 billion in June by Essar Steel Holdings Ltd. of India,
which has said it plans to invest $500 million to upgrade and expand Algoma's
operations.
* Harris Steel Group Inc. of Toronto,
purchased for $1.25 billion in March by Nucor Corp. of the United States.
* Dofasco Inc. of Hamilton acquired for $5.6
billion in February 2006 by Arcelor SA of Luxembourg, which is in the process
of merging with Mittal Steel of the Netherlands.
The takeover between U.S. Steel and Stelco
is essentially a done deal since it has already gotten the thumbs-up by
shareholders holding more than 76 per cent of Stelco's outstanding shares,
including Tricap Management Limited, Sunrise Partners LP, Appaloosa Management
LP and Stelco CEO Rodney Mott have agreed to support the deal.