The completed acquisition of a steel plant in Michigan and strong demand from automotive customers fed AK Steel’s financial results in the October to December quarter, and helped offset higher costs affecting full-year results.
As a result of higher sales, AK Steel recorded a quarterly profit of $13.5 million, according to results released Tuesday. West Chester Twp.-based AK Steel sold just over 2 million tons for net sales of approximately $2 billion during the three-month period, the company reported. Sales and shipments grew year-over-year, but so did expenses, and the company had a profit of $35.2 million for the same time a year ago.
Also last quarter, AK Steel completed the reline of its blast furnace hearth at the Ashland Works steel plant in Kentucky. And according to the company’s earnings release, shipments to the carbon spot market made via the blast furnace process increased in the fourth quarter from the prior July through September period.
“AK Steel’s improved financial performance represented its best quarter of the year and quarter-over-quarter reflects strong market demand for our automotive products, lower steelmaking input costs, and the first full quarter of results associated with the Dearborn Works acquisition,” said James Wainscott, chairman, president and chief executive officer of AK Steel, in a statement.
Despite ending 2014 with “the best quarter of the year,” the Butler County steelmaker’s net loss over the whole year widened to $96.9 million. The net loss in 2013 was approximately $46.8 million and last year’s results mean the Butler County steelmaker has experienced six consecutive years of earnings losses.
The company’s stock gained nearly 5 percent Tuesday to close at $4.25.
Sales increased 17 percent last year, compared to the year before, mainly due to the addition of another steel plant’s output and strong automotive demand, according to AK Steel. In September, AK Steel finalized its $700 million purchase of its eighth steel plant and expanded to Michigan with the move.
Hurting 2014 results were extreme winter weather conditions at the beginning of the year, which resulted in extra costs of approximately $45 million for 2014 including electricity and natural gas expenses. The harsh winter had also affected the delivery of iron ore pellets — a key raw material — in the April through May quarter of 2014, costing the company more for transportation and operations.
Production was halted twice in 2014 in February and July at Ashland Works due to some kind of malfunction or incident. It led the company to move a maintenance outage planned for 2015, earlier to 2014, to address the operational issues. The Ashland Works blast furnace was shutdown for more extensive repairs beginning in October and brought back online in December.
One of the Cincinnati-Dayton region’s largest publicly-held companies, AK Steel employs approximately 2,400 full-time workers in Butler County between headquarter operations and the Middletown Works steel plant. AK Steel facilities in Ohio, Kentucky, Indiana, Michigan, Pennsylvania and Minnesota employ approximately 8,000 and produce flat-rolled carbon, electrical and stainless steels used by the automotive, appliance, construction and manufacturing markets.