Touchstone Exploration Inc. press release
Stelco reports results for the fourth quarter and year 2004
TSX - Toronto Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · Canada
HAMILTON, ON, April 11 /CNW/ - Stelco Inc. (TSX:STE) today released its 2004 Audited Consolidated Financial Statements together with Management's Discussion and Analysis which outlines the Corporation's financial results and condition. The Corporation also released its Annual Information Form ("AIF") today. For the year ended December 31, 2004, Stelco reported net earnings of $65 million ($0.63 per common share) compared with a restated net loss of $564 million ($5.62 per common share) for the year ended December 31, 2003. In respect of the fourth quarter of 2004, net earnings were $1 million ($0.01 per common share) on production of 1,329,000 semi-finished tons and shipments of 1,156,000 tons. This compares to the fourth quarter 2003 restated net loss of $395 million ($3.89 per common share), which reported the same level of production and had shipments of 1,273,000 tons. In the fourth quarter of 2004 the Corporation recorded an $18 million pre-tax charge to write off the carrying value of property, plant and equipment of Stelwire and Stelpipe as well as a $10 million future income tax valuation allowance. In the fourth quarter of 2003 the Corporation recorded an $87 million pre-tax charge to write off the remaining book value of the plate mill assets and a $304 million future income tax valuation allowance. In its March 8, 2005 media release, the Corporation estimated fourth quarter operating earnings to be in the range of $45 million to $50 million prior to possible other adjustments that might be required as the statements were being finalized. Reported operating earnings were $29 million, with the difference being the aforementioned $18 million write off. Operating earnings is a non-generally accepted accounting principles financial measure -- for a description of this financial measure please refer to the March 8, 2005 media release. As a result of an accounting policy change in 2004 related to asset retirement obligations the 2003 financial statements have been restated as necessary to make them comparative to 2004. This change had a relatively minor impact on net earnings/losses in each year. Cash generation for the year 2004 amounted to $19 million compared to cash usage of $114 million in 2003. The Corporation's net short-term debt decreased from $192 million as at December 31, 2003 to $173 million as at December 31, 2004. Major elements of the 2004 cash generation included:
$360 million generation from cash earnings before working capital changes. $251 million usage of cash through changes in working capital. $54 million usage for capital expenditures. $32 million usage for reduction of long-term debt not subject to compromise.
On December 31, 2004, net liquidity (generally, cash and cash equivalents plus available lines of credit, less lines of credit drawn down) was $287 million on a consolidated basis and $237 million for the CCAA Applicants. Courtney Pratt, Stelco's President and Chief Executive Officer, said, "While our cash and financial positions have obviously improved during the past year, we had hoped for a more positive fourth quarter. As we indicated on March 8, 2005, the results for that period were adversely affected by repair and maintenance activity, the resulting impact on output and productivity, and the increased cost of such raw materials as coke, coal and scrap. Looking ahead, we anticipate a positive year in 2005 in terms of operating earnings and steel prices. As a consequence the Company is reaffirming its 2005 guidance issued on March 8, 2005. We remain focused on achieving the successful conclusion of our Court-supervised restructuring process in the coming months." Stelco's 2004 Management's Discussion and Analysis, Audited Consolidated Financial Statements and Notes, and AIF are available on Stelco's Web site www.stelco.com and will be filed at SEDAR.com today.
About Stelco Stelco Inc. is a large, diversified steel producer. Stelco is involved in major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. This news release may contain forward-looking information with respect to the Corporation's business operations, financial performance and conditions. Actual results may differ from expected results for a variety of reasons including factors discussed in the Corporation's Management's Discussion and Analysis section of the Corporation's 2004 Annual Report. To learn more about Stelco and its businesses, please refer to our Web site at www.stelco.ca. %SEDAR: 00001549E