Stelco Holdings Inc T.STLC

Earnings released - dividend increased almost 20%

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Stelco has released their Q4 earnings.  Here are some of the highlights.

Stelco Holdings Inc. fourth quarter highlights include:

• Revenue of $613 million for the quarter, down 9% from Q4 2022 and 21% from Q3 2023
• Operating loss of $16 million for the quarter
• Adjusted EBITDA* of $51 million, down 38% from Q4 2022 and 67% from Q3 2023, representing an 8% margin
• Adjusted Net Income* of $9 million and Adjusted Net Income per common share* of $0.16, down 72% from Q4 2022 and 88% from Q3 2023
• Shipping Volume* of 609 thousand tons, down 9% from Q4 2022 and 8% from Q3 2023
• Average Selling Price* per net ton of $941, down 2% from Q4 2022 and 13% from Q3 2023
• Quarterly dividend increased by almost 20% to $0.50 per share, payable on March 7, 2024
• Plans to commence NCIB to purchase up to 3,344,684 common shares

Alex Kestenbaum, the Executive Chairman and CEO, was optimistic about the coming year,

“Our fourth quarter results were down over the previous quarter, but we do expect improved margins in Q1 and into Q2 2024, as we begin to realize the higher market pricing that we saw in the latter part of 2023,” said Alan Kestenbaum, Executive Chairman and Chief Executive Officer. “We remain optimistic that market demand will stay strong and that the fundamental strength we have built into our business will allow us to continue to generate cash and in turn deliver positive results that benefit our shareholders. Further to our commitment to effectively deploy capital, we are launching a normal course issuer bid that will allow the Company to purchase up to 3,344,684 common shares. We are also pleased to increase our regular quarterly dividend by almost 20% to 50 cents per share.”

If the price of steel can continue to increase I expect the share price to follow suit.  The increase in the dividend should bring in more buyers thus boosting the share price.  Look for a nice increase in the coming days and weeks.