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

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.

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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.