Steel Companies Report Finances

International Steel Group

International Steel Group Inc. reported fourth-quarter 2004 net income of $606.0 million and net income of $1.027.4 billion for the year ended December 31, 2004.

The company noted that its fourth quarter operating income was $258.9 million, $68 per ton shipped, compared to $340.4 million, $84 per ton shipped, in the third quarter 2004. Net sales declined slightly to $2.553.5 billion in the fourth quarter 2004 from $2.608.3 billion in the third quarter. Shipments declined to 3,828,000 tons in the fourth quarter from 4,039,000 tons in the third quarter principally as a result of a planned outage at our Burns Harbor steelmaking facilities. The company’s average net sales per ton shipped was $667 in the fourth quarter 2004 compared to $646 in the third quarter.

In its outlook, the company noted that underlying demand remains fairly good in most market segments. Order entry has increased somewhat from the seasonally slow fourth quarter. Customer inventories, especially at service centers, are relatively high but are being consumed. Our first quarter 2005 shipments are expected to be about 4.0 million tons and average sales per ton shipped is expected to increase modestly. Costs per ton shipped should be about the same as the fourth quarter. This is because we do not have any major equipment outages planned and we expect some reduction in the cost of natural gas and scrap which should be offset by higher prices for iron ore and coal.

Algoma Steel

Algoma Steel Inc. reported net income of $122.2 million for the three months ended December 31, 2004. This compares to net income of $10.1 million for the three months ended December 31, 2003 and net income in the third quarter of 2004 of $121.6 million. EBITDA was $191.2 million for the quarter compared to $202.0 million for the third quarter of 2004.

The company alsoi announced that it does not intend to submit a binding offer for Stelco. Algoma has been engaged in due diligence and in discussions with Stelco and its stakeholders since mid-December. Denis Turcotte, president and CEO, stated, "Algoma's due diligence has confirmed that there are significant potential benefits in a combination of Algoma and Stelco, but given the risks and obligations associated with the acquisition, we have concluded that proceeding with the transaction would not be in the best interests of our shareholders."

Revenue for the fourth quarter of 2004 was $489.8 million, an increase of $222.0 million versus the three months ended December 31, 2003 and a decrease of $45.9 million versus the third quarter of 2004.

The increase over 2003 was mainly the result of higher steel selling prices, whereas the decrease from the third quarter was due mainly to lower shipments. The average steel price per ton for the fourth quarter was $878 versus $475 for the comparable three-month period in 2003.

Pricing fell slightly from the highs experienced in the third quarter in which the average steel price per ton was $895.

Steel shipments in the fourth quarter totaled 523,900 tons, down 34,200 tons from the third quarter. The decline was a reflection of normal seasonal activity. Steel shipments were up 11,600 tons from the comparable period in 2003.

Sales for the twelve months ended December 31, 2004 totaled $1.803.1 billion, an increase of $664.9 million versus last year. The increase was due mainly to higher steel prices that averaged $761 per ton, an improvement of $277 per ton or 57 percent versus 2003.

Steel shipments for the year ended December 31, 2004 totaled 2.198 million tons, an increase of 28,200 tons from 2003.

The company expects spot prices for sheet and plate products to be lower than in the fourth quarter of 2004, although an increase in contract prices is expected to offset most of the effect of lower spot prices. The level of contract sales for 2005 approximates 50 percent. Excess inventories are currently suppressing prices and North American demand from several market sectors has weakened from 2004 levels. Management is optimistic that this inventory overhang is temporary and believes that pricing will stabilize in the coming months. Shipments are expected to increase from the fourth quarter level which was affected by seasonal factors.

Mittal Steel

Mittal Steel Co. announced results for the twelve months and fourth quarter ended December 31, 2004.

Lakshmi N. Mittal, chairman and CEO, of Mittal Steel, said: "2004 was an excellent year for Mittal Steel. We experienced a strong demand for our products across all markets, combined with higher selling prices and a substantial rise in our total shipments due to the completion of a number of key strategic acquisitions.

“This resulted in record results for the company. Our focus has always been to be a low-cost producer and this is reflected in our operating margin of 27.7 percent. Mittal Steel has now built positions of strength across our key three operating regions: Americas, Europe and the Rest of the World. Looking forward, we are anticipating stable demand during 2005. Global supply and demand remains fairly balanced and Mittal Steel is well positioned to take advantage of the current market dynamics."

Mittal Steel reported net income for the twelve months was $4.7 billion, compared to net income of $1.2 billion for the twelve months ended December 31, 2003.    

Consolidated sales and operating income for the twelve months ended December 31, 2004 were $22.2 billion and $6.1 billion, respectively, compared to $9.6 billion and $1.3 billion, respectively, for the twelve months ended December 31, 2003.    

Total steel shipments for the year 2004 were 42.1 million tons as compared to 27.4 million tons in 2003.    

Mittal Steel Company N.V. net income for the fourth quarter of 2004 was $1.6 billion, compared to net income of $1.3 billion for the third quarter of 2004.    

Consolidated sales and operating income for the fourth quarter of 2004 were $6.2 billion and $1.7 billion, respectively, as compared to $6.3 billion and $1.9 billion, respectively, for the third quarter of 2004.