/NOT FOR DISTRIBUTION TO
- Revenue of
$1,186 million for the quarter, up 180% from Q4 2020 and down 12% from Q3 2021 - Operating income of
$653 million for the quarter, representing a 55% margin - Adjusted EBITDA* of
$673 million for the quarter, representing a 57% Adjusted EBITDA* margin - Adjusted Net Income* of
$525 million and Adjusted Net Income* per share of$6.79 , down 17% from Q3 2021 - Shipping Volume* of 626,000 tons for the quarter, up 28% from Q4 2020 and down 12% from Q3 2021
- Average Selling Price* per net ton of
$1,845 , up 153% from Q4 2020 and up 2% from Q3 2021 - Declared quarterly dividend of
$0.30 per share payable onMarch 9, 2022
Selected Financial Information:
(in millions Canadian dollars, except | Q4 2021 | Q4 2020 | Change | Q3 2021 | Change | 2021 | 2020 | Change |
Revenue ($) | 1,186 | 424 | 180% | 1,354 | (12)% | 4,123 | 1,517 | 172% |
Operating income (loss) ($) | 653 | 39 | 1,574% | 770 | (15)% | 1,983 | (7) | NM |
Net income (loss) ($) | 513 | (47) | NM | 614 | (16)% | 1,609 | (159) | NM |
Adjusted Net Income (Loss) ($) * | 525 | 45 | 1,067% | 629 | (17)% | 1,709 | (52) | NM |
Net income (loss) per common share | 6.64 | (0.53) | NM | 7.42 | (11)% | 19.08 | (1.79) | NM |
Adjusted Net Income (Loss) per | 6.79 | 0.51 | 1,231% | 7.60 | (11)% | 20.26 | (0.59) | NM |
Average Selling Price per nt ($) * | 1,845 | 728 | 153% | 1,808 | 2% | 1,473 | 705 | 109% |
Shipping Volume (in thousands of nt) * | 626 | 489 | 28% | 710 | (12)% | 2,690 | 2,020 | 33% |
Adjusted EBITDA ($) * | 673 | 60 | 1,022% | 787 | (14)% | 2,055 | 75 | 2,640% |
Adjusted EBITDA per nt ($) * | 1,075 | 123 | 774% | 1,108 | (3)% | 764 | 37 | 1,965% |
* | See "Non-IFRS measures" for a description of certain Non-IFRS measures used in this Press Release and "Non-IFRS Measures Reconciliation" |
NM = Not Meaningful |
"Today
"We completed 2021 with over
"Of course, our management team remains very closely aligned with the interests of our fellow shareholders," added Kestenbaum. "That alignment is core to our approach and led to our
"We entered 2022 with total liquidity of almost
Fourth Quarter 2021 Financial Review:
Compared to Q4 2020
Q4 2021 revenue increased $762 million, or 180%, from $424 million in Q4 2020, primarily due to a 153% increase in Average Selling Price per net ton and a 28% increase in Shipping Volumes, partly offset by lower non-steel sales of $37 million. The Average Selling Price per net ton of our steel products increased from
The Company realized operating income of
Finance costs increased by
The Company realized net income of $513 million for the quarter, compared to a net loss of
Adjusted EBITDA in Q4 2021 totaled $673 million, an increase of $613 million from $60 million in Q4 2020, which reflects an increase in Average Selling Price per net ton and higher Shipping Volumes, partly offset by higher cost of goods sold and lower non-steel sales during the period.
Compared to Q3 2021
Q4 2021 revenue decreased $168 million, or 12%, from
The Company realized an operating income of
Full Year 2021 Financial Review:
Revenue for 2021 increased
Operating income for the year increased
Finance costs increased $111 million from $51 million in 2020, due to the following: $103 million related to the gross remeasurement impact of our employee benefit commitment, $4 million higher accretion expense associated with our employee benefit commitment and $4 million related to the period-over-period impact of foreign exchange translation on
Net income for the year was $1,609 million, compared to a net loss of $159 million in 2020, a change of
Adjusted EBITDA in 2021 totaled $2,055 million, an increase of $1,980 million, from $75 million in 2020, which reflects the increases in Average Selling Price per net ton, Shipping Volumes and non-steel sales during the period.
Summary of Net Tons Shipped by Product:
(in thousands of nt)
Tons Shipped by Product | Q4 2021 | Q4 2020 | Change | Q3 2021 | Change | 2021 | 2020 | Change |
Hot-rolled | 474 | 373 | 27 % | 542 | (13) % | 1,973 | 1,454 | 36 % |
Coated | 93 | 64 | 45 % | 123 | (24) % | 498 | 361 | 38 % |
Cold-rolled | 11 | 15 | (27) % | 11 | — % | 63 | 81 | (22) % |
Other a | 48 | 37 | 30 % | 34 | 41 % | 156 | 124 | 26 % |
Total | 626 | 489 | 28 % | 710 | (12) % | 2,690 | 2,020 | 33 % |
Shipments by Product (%) | ||||||||
Hot-rolled | 76 % | 76 % | 76 % | 73 % | 72 % | |||
Coated | 15 % | 13 % | 17 % | 19 % | 18 % | |||
Cold-rolled | 2 % | 3 % | 2 % | 2 % | 4 % | |||
Other a | 7 % | 8 % | 5 % | 6 % | 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, the Company ended the year with cash of $955 million and $240 million of availability under its revolving credit facility as at
(millions of Canadian dollars) | ||
As at | ||
ASSETS | ||
Cash | 955 | 59 |
Trade and other receivables | 412 | 183 |
Inventories | 617 | 509 |
Total current assets | 2,015 | 791 |
Derivative asset | 126 | 133 |
Property, plant and equipment, net | 1,008 | 845 |
Deferred tax asset | 78 | — |
Total non-current assets | 1,222 | 988 |
Total assets | 3,237 | 1,779 |
LIABILITIES | ||
Trade and other payables | 717 | 668 |
Derivative liabilities | — | 84 |
Asset-based lending facility | 15 | 15 |
Income taxes payable | 252 | — |
Obligations to independent employee trusts | 212 | 36 |
Total current liabilities | 1,258 | 847 |
Asset-based lending facility | 69 | 113 |
Obligations to independent employee trusts | 383 | 462 |
Total non-current liabilities | 541 | 651 |
Total liabilities | 1,799 | 1,498 |
Total equity | 1,438 | 281 |
Normal Course Issuer Bid
The Company has received approval from the
The maximum number of common shares that may be repurchased for cancellation under the NCIB represents approximately 10% of the Company's public float as of
The Board of Directors of the Company believes that the underlying value of the Company may not be reflected in the market price of the common shares from time to time and that, accordingly, the purchase of common shares will increase the proportionate interest in the Company of, and be advantageous to, all remaining shareholders of
Repurchases will be made through the facilities of the TSX as well as through other designated exchanges and alternative trading systems in
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 consolidated financial statements for the year 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 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 year 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", "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: expectations that we will be able to successfully adapt to changing market conditions and succeed across all points of the market cycle; 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 effect 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 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; 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 ongoing impact of the COVID-19 pandemic on our business, operations, employees, customers, suppliers and the economy overall; 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; 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.
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) | ||||||||
Three months ended | Years ended | |||||||
(millions of Canadian dollars) | 2021 | 2020 | 2021 | 2020 | ||||
Revenue from sale of goods | $ | 1,186 | $ | 424 | $ | 4,123 | $ | 1,517 |
Cost of goods sold | 513 | 367 | 2,082 | 1,476 | ||||
Gross profit | 673 | 57 | 2,041 | 41 | ||||
Selling, general and administrative expenses | 20 | 18 | 58 | 48 | ||||
Operating income (loss) | 653 | 39 | 1,983 | (7) | ||||
Other income (loss) and (expenses) | ||||||||
Finance (costs) recovery | (33) | 10 | (162) | (51) | ||||
Finance and other income (loss) | — | (89) | (32) | (87) | ||||
Other costs | (3) | (7) | (7) | (13) | ||||
Share of income (loss) from joint ventures | — | — | — | (1) | ||||
Income (Loss) before income taxes | 617 | (47) | 1,782 | (159) | ||||
Current income tax expense | 127 | — | 252 | — | ||||
Deferred income tax (recovery) | (23) | — | (79) | — | ||||
Net income (loss) | $ | 513 | $ | (47) | $ | 1,609 | $ | (159) |
| ||||||||
As at | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 955 | $ | 59 | ||||
Restricted cash | 20 | 8 | ||||||
Trade and other receivables | 412 | 183 | ||||||
Inventories | 617 | 509 | ||||||
Prepaid expenses and deposits | 11 | 32 | ||||||
Total current assets | $ | 2,015 | $ | 791 | ||||
Non-current assets | ||||||||
Derivative asset | 126 | 133 | ||||||
Property, plant and equipment, net | 1,008 | 845 | ||||||
Intangible assets | 8 | 8 | ||||||
Investment in joint ventures | 2 | 2 | ||||||
Deferred tax asset | 78 | — | ||||||
Total non-current assets | $ | 1,222 | $ | 988 | ||||
Total assets | $ | 3,237 | $ | 1,779 | ||||
LIABILITIES | ||||||||
Current liabilities | ||||||||
Trade and other payables | $ | 717 | 668 | |||||
Derivative liabilities | — | 84 | ||||||
Other liabilities | 62 | 44 | ||||||
Asset-based lending facility | 15 | 15 | ||||||
Income taxes payable | 252 | — | ||||||
Obligations to independent employee trusts | 212 | 36 | ||||||
Total current liabilities | $ | 1,258 | $ | 847 | ||||
Non-current liabilities | ||||||||
Provisions | 7 | 6 | ||||||
Pension benefits | 11 | 11 | ||||||
Other liabilities | 71 | 59 | ||||||
Asset-based lending facility | 69 | 113 | ||||||
Obligations to independent employee trusts | 383 | 462 | ||||||
Total non-current liabilities | $ | 541 | $ | 651 | ||||
Total liabilities | $ | 1,799 | $ | 1,498 | ||||
EQUITY | ||||||||
Common shares | 446 | 512 | ||||||
Retained earnings (Accumulated deficit) | 992 | (231) | ||||||
Total equity | $ | 1,438 | $ | 281 | ||||
Total liabilities and equity | $ | 3,237 | $ | 1,779 |
Non-IFRS Measures Results
The following table provides a reconciliation of net income (loss) to Adjusted Net Income (Loss) for the periods indicated:
Three months ended | Years ended | |||||||
(millions of Canadian dollars) | 2021 | 2020 | 2021 | 2020 | ||||
Net income (loss) | $ | 513 | $ | (47) | $ | 1,609 | $ | (159) |
Add back/(Deduct) following items: | ||||||||
Remeasurement of employee benefit commitment 1 | 12 | (11) | 91 | (12) | ||||
Loss from commodity-based swaps | — | 86 | 27 | 90 | ||||
Loss on derivative asset | 1 | — | 7 | — | ||||
Other costs | 3 | 7 | 7 | 13 | ||||
Transaction-based and other corporate-related costs 2 | 1 | 8 | 2 | 12 | ||||
Other | — | 2 | — | 4 | ||||
Total adjusted items before tax | 17 | 92 | 134 | 107 | ||||
Tax impact of above items | (5) | — | (34) | — | ||||
Total adjusted items after tax | 12 | 92 | 100 | 107 | ||||
Adjusted Net Income (Loss) | $ | 525 | $ | 45 | $ | 1,709 | $ | (52) |
1 | Remeasurement of employee benefit commitment for change in the timing of estimated cash flows and future funding requirements. |
2 | Represents certain non-routine items that include, but are not limited to, professional and consulting fees in connection with the cyberattack and acquisition of the Option during 2020. |
The following table provides a reconciliation of net income (loss) to Adjusted EBITDA for the periods indicated:
(millions of Canadian dollars, except where otherwise | Three months ended | Years ended | ||||||
2021 | 2020 | 2021 | 2020 | |||||
Net income (loss) | $ | 513 | $ | (47) | $ | 1,609 | $ | (159) |
Add back/(Deduct) following items: | ||||||||
Income tax expense (recovery): | ||||||||
Current | 127 | — | 252 | — | ||||
Deferred | (23) | — | (79) | — | ||||
Finance costs (recovery) | 33 | (10) | 162 | 51 | ||||
Depreciation | 19 | 14 | 69 | 66 | ||||
Loss from commodity-based swaps | — | 86 | 27 | 90 | ||||
Loss on derivative asset | 1 | — | 7 | — | ||||
Other costs | 3 | 7 | 7 | 13 | ||||
Transaction-based and other corporate-related costs 1 | 1 | 8 | 2 | 12 | ||||
Finance income | (1) | — | (1) | (2) | ||||
Other | — | 2 | — | 4 | ||||
Adjusted EBITDA | $ | 673 | $ | 60 | $ | 2,055 | $ | 75 |
Adjusted EBITDA as a percentage of total revenue | 57 % | 14 % | 50 % | 5 % |
1 | Represents certain non-routine items that include, but are not limited to, professional and consulting fees in connection with the cyberattack and acquisition of the Option during 2020. |
SOURCE
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