Earnings Are Out - Q1/05 $2.20 per shareAlgoma Steel Inc. today released its first quarter results for 2005.
First Quarter Highlights: - EBITDA of $157.8 million. - Net income of $89.1 million. - Cash/short-term investments grow to $602 million. - Strategic review continues.
Algoma Steel Inc. reported net income of $89.1 million for the three months ended March 31, 2005 or $2.20 per common share. This compares to net income of $22.1 million for the first quarter of 2004 and net income in the fourth quarter of 2004 of $122.2 million. EBITDA for the first quarter was $157.8 million compared to $59.9 million for the same quarter of 2004 and $191.2 million for the fourth quarter of 2004. The decline from the fourth quarter of 2004 was due mainly to higher costs related to raw material prices, energy, and pension and post-employment expense. Cash and short-term investments increased by $148.8 million, reaching $602.0 million at March 31, 2005 or approximately $15 per share.
The Company continues to analyze strategic alternatives which include capital reinvestment, expansion opportunities through acquisition, joint venture or other business arrangements, and the sale or merging of the business.
Denis Turcotte, President and Chief Executive Officer, commented, "We continue to generate strong financial results despite declining spot prices and the escalation of certain external input costs. We remain focused on shareholder value and are cognizant that we now have a cash balance that likely exceeds that needed for reinvestment and other prudent uses." Ben Duster, Algoma's Chairman, added, "The Board has been active in terms of evaluating strategic alternatives available to the Company and will pursue the path that will create the highest value for our shareholders. We believe that the Company will be in a position to make announcements relative to this process and a potential return of capital to shareholders by the third quarter."