Dofasco Inc. reported consolidated net income of $38.8 million for the recently concluded quarter. This compares with last year’s second quarter when Dofasco’s net income was $69.7 million.
Dofasco's consolidated sales of $923 million in the second quarter, almost identical to the same period in 2002, despite a decline in steel shipments to 1.2 million tons from 1.295 million tons a year earlier.
Dofasco's Steel Operations segment, including the company's Hamilton, Ont., operations, reported income before income taxes of $53.1 million in the quarter, compared to $93.7 million, restated for the second quarter of 2002. Shipments from Hamilton were 1,019,000 tons, compared to 1,114,000 tons in the same quarter of 2002.
Higher contract prices, partially offset by lower spot prices, and continued movement toward a higher value product mix, resulted in a $38 increase in the average revenue realized per ton of steel shipped from Hamilton in the second quarter of 2003 compared to the same period in 2002.
The average cost per ton of steel shipped increased by $57 relative to the second quarter of 2002 due largely to lower production levels, higher energy costs and to an increase in the use and cost of purchased slabs.
Gallatin Steel shipped a record 385,000 tons in the quarter, up from the 362,000 tons shipped in the second quarter of 2002. Excellent operating performance and record quarterly shipments reduced the impact of lower selling prices and higher scrap and energy costs.
Looking forward, Don Pether, Dofasco’s president and CEO, said, "North American steel markets are showing preliminary signs of improving. But the sustainability of the trend is still cloudy and uncertain. At Dofasco, we are continuing to focus on product quality, customer service and cost control. We continue to pursue initiatives to find immediate, innovative and sustainable ways to increase revenues, reduce costs and enhance margins, for the remainder of 2003 and beyond."