TimkenSteel reports loss to close out 2022

Canton, Ohio-based electric arc furnace (EAF) steelmaker TimkenSteel experienced a net loss of $33.2 million in the fourth quarter of 2022 but closed out the year with a net income of $65.1 million.

The company’s net sales dropped to $245.4 million in the fourth quarter, down 22.5 percent from $316.8 million in sales the prior quarter.

“In the first half of 2022, we achieved record profitability and solid operating cash flow,” TimkenSteel President and CEO Mike Williams says. “However, safety performance, production output and profitability were disappointing in the second half of the year. As an organization, we remain committed to improving our safety culture and performance. As we continue to ramp up production, we are focused on enhancing our manufacturing excellence and asset reliability programs. Looking ahead for the remainder of 2023, we expect to make further progress on our strategic imperatives and anticipate end market demand and base pricing to remain healthy while our balance sheet remains strong.”

In July of last year, an explosion at the TimkenSteel EAF Faircrest mill near Canton killed one worker and injured two others, according to local media reports. The incident also affected output from the mill in the second half of last year.

Regarding the fourth-quarter sales decrease, the company says it was “primarily related to a market-driven reduction in surcharge revenue per ton as a result of lower scrap and alloy prices, as well as the impact from lower shipments.”

Capacity recovery after the accident might be discernible in the fourth-quarter figures, however, with TimkenSteel saying its “melt utilization improved to 47 percent [in the fourth quarter] from 40 percent in the third quarter.”

In looking at its prospects for this year, TimkenSteel says in part, “The company expects to report a sequential increase in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the first quarter of 2023.”

The company adds, “Customer demand remains solid with opportunities for further profitability enhancement through our commercial excellence initiatives. Our order book is expected to remain full in the first half of 2023.”

TimkenSteel, melted more than 800,000 tons of scrap in 2020 and is predicting a rebound in its ability to buy ferrous scrap this year compared with its low capacity rate in late 2022. “The company expects continued improvement in its melt utilization rate throughout the first quarter, with an average melt utilization rate of approximately 70 percent for the quarter,” according to the company.