HAMILTON, Ontario - Stelco Holdings Inc. ('Stelco Holdings' or the 'Company'), (TSX: STLC), a low cost, integrated and independent steelmaker with one of the newest and most technologically advanced integrated steelmaking facilities in North America, announced financial results of the Company for the three months ended March 31, 2023. Stelco Holdings is the 100% owner of Stelco Inc. ('Stelco'), the operating company.

First Quarter 2022 Financial Review

Compared to Q1 2022

Q1 2023 revenue decreased $219 million, or 24%, from $906 million in Q1 2022, primarily due to a 36% decrease in Average Selling Price per net ton, partly offset by a 17% increase in Shipping Volume. The Average Selling Price per net ton of our steel products decreased from $1,493 per nt in Q1 2022 to $960 per nt in Q1 2023. Our Shipping Volume increased 101 thousand nt to 695 thousand nt from 594 thousand nt in Q1 2022.

The Company realized operating income of $18 million for the quarter, compared to $381 million in Q1 2022, a decrease of $363 million consisting of a decline in revenue of $219 million, an increase in cost of goods sold of $139 million, and higher selling, general and administrative expenses of $5 million.

Finance costs increased by $2 million, from $27 million in Q1 2022 to $29 million in Q1 2023, due to the following: $7 million higher accretion expense related to lease and other related obligations and a $5 million increase in interest on loans and borrowings, partly offset by $6 million connected to the period-over-period impact of foreign exchange translation on U.S. dollar denominated working capital, $3 million lower accretion expense associated with our employee benefit commitment obligation, and a $2 million change related to the remeasurement impact from our employee benefit commitment obligation.

The Company realized a net loss of $11 million for the quarter, compared to net income of $262 million in the first quarter of 2022, a change of $273 million primarily due to the following: $363 million decrease in operating income, $3 million lower finance and other income, and $2 million higher finance costs, partly offset by an $80 million decrease in current tax expense, $12 million change in deferred taxes and $4 million decrease in other costs. Adjusted Net Income totaled $10 million in Q1 2023, a change of $258 million from $268 million in Q1 2022.

Adjusted EBITDA in Q1 2023 totaled $65 million, a decrease of $337 million from $402 million in Q1 2022, which mostly reflects a decrease in Average Selling Price per net ton, the impact of higher Shipping Volume and increased cost of goods sold in the period.

Compared to Q4 2022

Q1 2023 revenue increased $13 million, or 2%, from $674 million in Q4 2022, primarily due a 4% increase in Shipping Volume. Our Shipping Volume increased from 670 thousand nt in Q4 2022 to 695 thousand nt in Q1 2023. The Average Selling Price per net ton of our steel products declined less than 1% from $963 per nt in Q4 2022 to $960 per nt in Q1 2023. Non-steel sales decreased by $9 million, from $29 million in Q4 2022 to $20 million during Q1 2023.

The Company realized operating income of $18 million in Q1 2023 compared to $47 million in Q4 2022, and Adjusted EBITDA of $65 million compared to $82 million during Q4 2022, which mostly reflects an increase in cost of goods sold, lower Average Selling Price per net ton and the impact of higher Shipping Volume in the period.

About Stelco

Stelco is a low cost, integrated and independent steelmaker with one of the newest and most technologically advanced integrated steelmaking facilities in North America. Stelco produces flat-rolled value-added steels, including premium-quality coated, cold-rolled and hot-rolled steel products, as well as pig iron and metallurgical coke. With first-rate gauge, crown, and shape control, as well as uniform through-coil mechanical properties, our steel products are supplied to customers in the construction, automotive, energy, appliance, and pipe and tube industries across Canada and the United States as well as to a variety of steel service centres, which are distributors of steel products. At Stelco, we understand the importance of our business reflecting the communities we serve and are committed to diversity and inclusion as a core part of our workplace culture, in part, through active participation in the BlackNorth Initiative.

Non-IFRS Measures

This news release refers to certain non-IFRS measures that are not recognized under International Financial Reporting Standards ('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', 'Adjusted EBITDA', 'Adjusted EBITDA per nt', '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, to 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 three months ended March 31, 2023 available under the Company's profile on SEDAR at www.sedar.com.

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, acquisitions, opportunities, budgets, operations, financial results, taxes, dividend policy, Average Selling Prices, Shipping Volumes, Adjusted EBITDA margins, 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', 'goal', 'scheduled', 'estimates', 'outlook', 'forecasts', 'projection', 'prospects', 'strategy', 'intends', 'anticipates', 'does not anticipate', 'believes', or variations of such words and phrases or state 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: statements targeting an anticipated increase in earnings in the second quarter; statements regarding an anticipated buildup of cash during the second quarter; statements regarding an effective deployment of our capital allocation strategy; expectations regarding stronger Adjusted EBITDA margins in the second quarter; expectations regarding significant increases to Average Selling Prices in the second quarter; expectations regarding expected Shipping Volumes in the second quarter; statements regarding our dividend policy; statements regarding our strong balance sheet; and statements regarding capital deployment opportunities.

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: an increase to the Average Selling Price of our products, our ability to achieve Shipping Volumes that are relatively consistent with our previous four fiscal quarters; our ability to complete capital projects on schedule and within budget and their anticipated effect on revenue and costs; our ability to obtain all applicable regulatory approvals required for our current and future operations; our ability to source necessary volumes of raw materials and other inputs at competitive prices; our iron ore pellet supply agreement providing us with competitively priced iron ore pellets during the term of the agreement; our facilities operating at design capacity; 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 effect on revenue and costs; relaxation of inflationary input costs; stabilization of the interest rate environment; 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.

Contact:

Investor

Paul D. Scherzer

Chief Financial Officer

T: (905) 577-4432

E: paul.scherzer@stelco.com

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