AK Steel's Profits Soared 18% in Second Quarter 2019

The net sales totaled $1.7 billion lower by 4% year-on-year, mainly on account of reduced shipments to the automotive market and lower spot market selling prices.

SEATTLE (Scrap Monster): West Chester, Butler County, Ohio-headquartered AK Steel announced financial results for the second quarter of the current year.

The company reported net income of $66.8 million or $0.21 per diluted share. This is higher by 18% when compared with the net income of $56.6 million or $0.18 per diluted share in the second quarter of 2018. The adjusted EBITDA was $151.5 million or 9% of sales during the quarter. It increased by 2% from $148.4 million or 8.5% of sales in the second quarter a year before, said the company press release.

The net sales totaled $1.7 billion lower by 4% year-on-year, mainly on account of reduced shipments to the automotive market and lower spot market selling prices.

ALSO READ: AK Steel Reaches Labor Deal at Butler Works Plant

Commenting on the results, Roger K. Newport, Chief Executive Officer noted that the company managed to report solid earnings despite dramatic decline in carbon spot market pricing from the year-ago level. The company focused more on value-added products with fixed price contracts. Also, it generated strong free cash flow, which in turn contributed to significant debt reduction during the quarter. Incidentally, the company repaid $95 million of borrowings under the company’s revolving credit facility in Q2 this year.

Assuming earnings hit of approximately $5-$7 million for every $10 change in carbon hot-rolled coil spot market price, the company expects the annual net income to range between $41 million and $61 million or $0.13 to $0.20 per diluted share. Also, the adjusted EBITDA is likely to remain in the range of $470 to $490 million.

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