/NOT FOR DISTRIBUTION TO
- Revenue of
$1,354 million for the quarter, up 47% from Q2 2021 - Operating income of
$770 million for the quarter, representing a 57% margin for the quarter - Adjusted EBITDA* of
$787 million for the quarter, representing a 58% Adjusted EBITDA* margin, up 92% from Q2 2021 - Adjusted Net Income* of
$629 million and Adjusted Net Income* per share1 of$7.60 - Shipping Volume* of 710,000 tons for the quarter up 5% from Q2 2021
- Record cash generation resulting in
$410 million cash balance at the end of Q3 while returning a record$413 million to shareholders during the quarter - Average Selling Price* per net ton of
$1,808 , up 40% from Q2 2021 - Declared quarterly dividend of
$0.30 per share, up 50%, payable onNovember 30, 2021
Selected Financial Information:
(in millions Canadian dollars, except | Q3 2021 | Q3 2020 | Change | Q2 2021 | Change | YTD 2021 | YTD 2020 | Change | ||||||||
Revenue ($) | 1,354 | 237 | 471 | % | 918 | 47 | % | 2,937 | 1,093 | 169 | % | |||||
Operating income (loss) ($) | 770 | (69) | NM | 393 | 96 | % | 1,330 | (46) | NM | |||||||
Net income (loss) ($) | 614 | (88) | NM | 363 | 69 | % | 1,096 | (112) | NM | |||||||
Adjusted Net Income (Loss) ($) * | 629 | (81) | NM | 383 | 64 | % | 1,184 | (97) | NM | |||||||
Net income (loss) per common share | 7.42 | (0.99) | NM | 4.09 | 81 | % | 12.64 | (1.26) | NM | |||||||
Adjusted Net Income (Loss) per common | 7.60 | (0.91) | NM | 4.32 | 76 | % | 13.65 | (1.09) | NM | |||||||
Average Selling Price per nt ($) * | 1,808 | 683 | 165 | % | 1,292 | 40 | % | 1,360 | 698 | 95 | % | |||||
Shipping Volume (in thousands of nt) * | 710 | 334 | 113 | % | 679 | 5 | % | 2,064 | 1,531 | 35 | % | |||||
Adjusted EBITDA (Loss) ($) * | 787 | (39) | NM | 410 | 92 | % | 1,382 | 15 | 9,113 | % | ||||||
Adjusted EBITDA (Loss) per nt ($) * | 1,108 | (117) | NM | 604 | 83 | % | 670 | 10 | 6,600 | % |
* | See "Non-IFRS measures" for a description of certain Non-IFRS measures used in this Press Release and "Non-IFRS Measures Reconciliation" below. |
1 | Based on weighted average of number of shares outstanding during Q3 2021 of 82,766 thousand, which is higher than the |
NM = Not Meaningful |
"I am thrilled to today announce the best quarterly results in
"
"Additionally, in keeping with our continued focus on returning cash to shareholders we are increasing our dividend by 50%," continued Kestenbaum. "This represents an approximately 3% yield and will bring the total returned to shareholders this year up to
"We have experienced tremendous growth and improvement from where our business was a year ago due in large part to our successful project to introduce
_____________________________ |
1 Represents Adjusted EBITDA for the quarter divided by total revenue for the quarter. |
Third Quarter 2021 Financial Review:
Compared to Q3 2020
Q3 2021 revenue increased
The Company realized operating income of
Finance costs increased by
The Company realized net income of $614 million for the quarter, compared to a net loss of
Adjusted EBITDA in Q3 2021 totaled
Compared to Q2 2021
Q3 2021 revenue increased
The Company realized an operating income of
Summary of Net Tons Shipped by Product:
(in thousands of nt)
Tons Shipped by Product | Q3 2021 | Q3 2020 | Change | Q2 2021 | Change | YTD 2021 | YTD 2020 | Change | ||||||||
Hot-rolled | 542 | 211 | 157 | % | 490 | 11 | % | 1,499 | 1,081 | 39 | % | |||||
Coated | 123 | 76 | 62 | % | 142 | (13) | % | 405 | 297 | 36 | % | |||||
Cold-rolled | 11 | 16 | (31) | % | 9 | 22 | % | 52 | 66 | (21) | % | |||||
Other a | 34 | 31 | 10 | % | 38 | (11) | % | 108 | 87 | 24 | % | |||||
Total | 710 | 334 | 113 | % | 679 | 5 | % | 2,064 | 1,531 | 35 | % | |||||
Shipments by Product (%) | ||||||||||||||||
Hot-rolled | 76 | % | 63 | % | 72 | % | 73 | % | 71 | % | ||||||
Coated | 17 | % | 23 | % | 21 | % | 20 | % | 19 | % | ||||||
Cold-rolled | 2 | % | 5 | % | 1 | % | 2 | % | 4 | % | ||||||
Other a | 5 | % | 9 | % | 6 | % | 5 | % | 6 | % | ||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
a | Includes other steel products: pig iron, slabs and non-prime steel sales. |
Statement of Financial Position and Liquidity:
On a consolidated basis,
(millions of Canadian dollars) | |||
As at | |||
ASSETS | |||
Cash | 410 | 59 | |
Trade and other receivables | 534 | 183 | |
Inventories | 487 | 509 | |
Total current assets | 1,456 | 791 | |
Derivative asset | 127 | 133 | |
Property, plant and equipment, net | 969 | 845 | |
Deferred tax asset | 56 | — | |
Total non-current assets | 1,162 | 988 | |
Total assets | 2,618 | 1,779 | |
LIABILITIES | |||
Trade and other payables | 740 | 668 | |
Derivative liabilities | — | 84 | |
Asset-based lending facility | 15 | 15 | |
Income taxes payable | 125 | — | |
Obligations to independent employee trusts | 221 | 36 | |
Total current liabilities | 1,152 | 847 | |
Asset-based lending facility | 72 | 113 | |
Obligations to independent employee trusts | 358 | 462 | |
Total non-current liabilities | 521 | 651 | |
Total liabilities | 1,673 | 1,498 | |
Total equity | 945 | 281 |
Declaration of Quarterly Dividend
The regular quarterly dividend has been designated as an "eligible dividend" for purposes of the Income Tax Act (
Quarterly Results Conference Call
Consolidated Financial Statements and Management's Discussion and Analysis
The Company's unaudited consolidated financial statements for the three and nine months ended
About
Non-IFRS Measures
This news release refers to certain non-IFRS measures that are not recognized under International Financial Reporting Standards ("IFRS") and do not have a standardized meaning prescribed by IFRS. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures including "Adjusted Net Income", "Adjusted Net Income per common share (diluted)", ''Adjusted EBITDA'', ''Adjusted EBITDA per nt'', "Adjusted EBITDA margin", ''Average Selling Price per nt'', and ''Shipping Volume'' to provide supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management uses these non-IFRS financial measures to facilitate operating performance comparisons from period-to-period, prepare annual operating budgets and forecasts, and drive performance through our management compensation program. For a reconciliation of these non-IFRS measures, refer to the Company's "Non-IFRS Measures Reconciliation" section below. For a definition of these non-IFRS measures, refer to the Company's MD&A for the period ended
Forward-Looking Information
This release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information may relate to our future outlook and anticipated events or results and may include information regarding our financial position, business strategy, growth strategy, acquisition opportunities, budgets, operations, financial results, taxes, dividend policy, plans and objectives of our Company. Particularly, information regarding our expectations of future results, performance, achievements, prospects or opportunities is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "budget", "scheduled", "estimates", "outlook", "forecasts", "projection", "prospects", "strategy", "intends", "anticipates" or "does not anticipate", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances may be forward-looking statements. Forward-looking statements are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances. The forward-looking statements contained herein are presented for the purpose of assisting the holders of our securities and financial analysts in understanding our financial position and results of operations as at and for the periods ended on the dates presented, as well as our financial performance objectives, vision and strategic goals, and may not be appropriate for other purposes.
Forward-looking information in this news release includes: expectations that we will continue to operate the business as one of the lowest-cost integrated steel producers in
Undue reliance should not be placed on forward-looking information. The forward-looking information in this press release is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Certain assumptions in respect of: our ability to complete new capital projects on schedule and within budget and their anticipated effects on revenue and costs; our ability to obtain all applicable regulatory approvals required in connection with new facilities; our ability to source necessary volumes of raw materials and other inputs at competitive prices; our facilities operating at design capacity; the market demand for iron units continuing to face increased pressure; our ability to supply to new customers and markets; our ability to effectively manage costs; our ability to attract and retain key personnel and skilled labour; our ability to obtain and maintain existing financing on acceptable terms; currency exchange and interest rates; the impact of competition; changes in laws, rule, and regulations, including international trade regulations; our ability to continue to access the U.S. market without any adverse trade restrictions; upgrades to existing facilities remaining on schedule and on budget and their anticipated effects on revenue and costs; and growth in steel markets and industry trends, as well as those set out in this press release, are material factors made in preparing the forward-looking information and management's expectations contained in this press release.
KEY ASSUMPTIONS UNDERLYING OUR SHIPPING VOLUME ESTIMATES FOR THE FORTH QUARTER OF 2021
The estimates with respect to our Shipping Volumes during the fourth quarter of 2021 referenced herein are based on a number of assumptions in addition to the foregoing assumptions, including, but not limited to, the following material assumptions: the Company's ability to continue to access the U.S. market without any adverse trade restrictions; no significant legal or regulatory developments, changes in economic conditions, or macro changes in the competitive environment affecting our business activities; upgrades to existing facilities remaining on schedule and on budget and their anticipated effects on revenue and costs; the Company's ability to attract new customers and further develop and maintain existing customers; currency exchange and interest rates; the impact of competition; and growth in steel markets and industry trends.
We believe that our performance and our ability to achieve these shipments during the fourth quarter of 2021 depend on a number of material factors including: (i) sustained global demand growth; (ii) continued steel production capacity curtailments in
There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents our expectations as of the date of this news release and are subject to change after such date.
Selected Financial Information
The following includes financial information prepared by management in accordance with IFRS. This financial information does not contain all disclosures required by IFRS, and accordingly should be read in conjunction with
Consolidated Statements of Income (Loss)
(unaudited)
Three months ended September | Nine months ended September | ||||||||||
(millions of Canadian dollars) | 2021 | 2020 | 2021 | 2020 | |||||||
Revenue from sale of goods | $ | 1,354 | $ | 237 | $ | 2,937 | $ | 1,093 | |||
Cost of goods sold | 571 | 297 | 1,569 | 1,109 | |||||||
Gross profit (loss) | 783 | (60) | 1,368 | (16) | |||||||
Selling, general and administrative expenses | 13 | 9 | 38 | 30 | |||||||
Operating income (loss) | 770 | (69) | 1,330 | (46) | |||||||
Other income (loss) and (expenses) | |||||||||||
Finance costs | (26) | (16) | (129) | (61) | |||||||
Finance and other income (loss) | (13) | (4) | (32) | 2 | |||||||
Other costs | (3) | — | (4) | (6) | |||||||
Share of income (loss) from joint ventures | — | 1 | — | (1) | |||||||
Income (loss) before income taxes | 728 | (88) | 1,165 | (112) | |||||||
Current income tax expense | (125) | — | (125) | — | |||||||
Deferred income tax recovery | 11 | — | 56 | — | |||||||
Net income (loss) | $ | 614 | $ | (88) | $ | 1,096 | $ | (112) |
Consolidated Balance Sheets (millions of Canadian dollars) (unaudited) | |||||
As at | |||||
ASSETS | |||||
Current assets | |||||
Cash | $ | 410 | $ | 59 | |
Restricted cash | 10 | 8 | |||
Trade and other receivables | 534 | 183 | |||
Inventories | 487 | 509 | |||
Prepaid expenses and deposits | 15 | 32 | |||
Total current assets | $ | 1,456 | $ | 791 | |
Non-current assets | |||||
Derivative asset | 127 | 133 | |||
Property, plant and equipment, net | 969 | 845 | |||
Intangible assets | 8 | 8 | |||
Investment in joint ventures | 2 | 2 | |||
Deferred tax asset | 56 | — | |||
Total non-current assets | $ | 1,162 | $ | 988 | |
Total assets | $ | 2,618 | $ | 1,779 | |
LIABILITIES | |||||
Current liabilities | |||||
Trade and other payables | $ | 740 | $ | 668 | |
Derivative liabilities | — | 84 | |||
Other liabilities | 51 | 44 | |||
Asset-based lending facility | 15 | 15 | |||
Income taxes payable | 125 | — | |||
Obligations to independent employee trusts | 221 | 36 | |||
Total current liabilities | $ | 1,152 | $ | 847 | |
Non-current liabilities | |||||
Provisions | 7 | 6 | |||
Pension benefits | 13 | 11 | |||
Other liabilities | 71 | 59 | |||
Asset-based lending facility | 72 | 113 | |||
Obligations to independent employee trusts | 358 | 462 | |||
Total non-current liabilities | $ | 521 | $ | 651 | |
Total liabilities | $ | 1,673 | $ | 1,498 | |
EQUITY | |||||
Common shares | 446 | 512 | |||
Retained earnings (Accumulated deficit) | 499 | (231) | |||
Total equity | $ | 945 | $ | 281 | |
Total liabilities and equity | $ | 2,618 | $ | 1,779 |
Non-IFRS Measures Results
The following table provide a reconciliation of net income (loss) to Adjusted Net Income (loss) for the period indicated:
Three months ended September | Nine months ended September | ||||||||||||
(millions of Canadian dollars) | 2021 | 2020 | 2021 | 2020 | |||||||||
Net income (loss) | $ | 614 | $ | (88) | $ | 1,096 | $ | (112) | |||||
Add back/(Deduct) following items: | |||||||||||||
Remeasurement of employee benefit commitment 1 | 3 | — | 79 | (1) | |||||||||
Loss from commodity-based swaps | — | 4 | 27 | 4 | |||||||||
Loss on derivative asset | 13 | — | 6 | — | |||||||||
Other costs | 3 | — | 4 | 6 | |||||||||
Transaction-based and other corporate-related costs | — | 1 | 1 | 4 | |||||||||
Other | — | 2 | — | 2 | |||||||||
Total adjusted items before tax | 19 | 7 | 117 | 15 | |||||||||
Tax impact of above items | (4) | — | (29) | — | |||||||||
Total adjusted items after tax | 15 | 7 | 88 | 15 | |||||||||
Adjusted Net Income (Loss) | $ | 629 | $ | (81) | $ | 1,184 | $ | (97) |
1 | Remeasurement of employee benefit commitment for change in the timing of estimated cash flows and future funding requirements. |
The following table provides a reconciliation of net income (loss) to Adjusted EBITDA (loss) for the periods indicated:
(millions of Canadian dollars, except where otherwise noted) | Three months ended September | Nine months ended September | |||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
Net income (loss) | $ | 614 | $ | (88) | $ | 1,096 | $ | (112) | |||
Add back/(Deduct) following items: | |||||||||||
Finance costs | 26 | 16 | 129 | 61 | |||||||
Income tax expense (recovery): | |||||||||||
Current | 125 | — | 125 | — | |||||||
Deferred | (11) | — | (56) | — | |||||||
Depreciation | 17 | 27 | 50 | 52 | |||||||
Loss from commodity-based swaps | — | 4 | 27 | 4 | |||||||
Loss on derivative asset | 13 | — | 6 | — | |||||||
Other costs | 3 | — | 4 | 6 | |||||||
Transaction-based and other corporate-related costs | — | 1 | 1 | 4 | |||||||
Finance income | — | (1) | — | (2) | |||||||
Other | — | 2 | — | 2 | |||||||
Adjusted EBITDA (Loss) | $ | 787 | $ | (39) | $ | 1,382 | $ | 15 | |||
Adjusted EBITDA as a percentage of total revenue | 58 | % | NM | 47 | % | 1 | % |
SOURCE
© Canada Newswire, source