Ispat Inland is the third local steelmaker to show a record income for 2004, reporting a net income of $258.7 million for the year. This was a complete turnaround from 2003 when the company lost $52.6 million.
Ispat Inland officials, who released the numbers on Wednesday, credited strong steel demand, higher selling prices and the company’s excellent operating performance for the strong earnings.
The net income for the fourth quarter was $41.7 million, up from a loss of $21.4 million in the fourth quarter of 2003.
The annual net income includes an after-tax gain of $21.2 million as a result of the property tax reassessment for 2002. The 2002 reassessment was not completed until the end of February 2004, company officials said.
Ispat Inland president and CEO Lou Schorsch said in a statement that he considers the results outstanding.
“Our employees worked hard to maintain high levels of production to meet increased customer demand throughout the year, and in the process, we established new hot metal and slab production records in 2004,” he said in the prepared statement.
Ispat Inland will hold a conference call for steel analysts at 10 a.m. today. Anyone can listen to the audio at the following Web site link: www.mittalsteel.com/Facilities/Americas/Ispat+Inland/.
Company officials are expected to discuss the earnings in greater detail today during that call.
Meanwhile, officials with Mittal Steel N.V., the parent company of Ispat Inland, and top brass from International Steel Group held a separate conference Wednesday in Chicago to present details about the upcoming merger between Mittal Steel and ISG. That merger is awaiting shareholder approval and is expected to be complete next month.
Union and company officials are in the midst of drafting a new contract for Ispat Inland workers that will be patterned after the ISG labor agreement.
Ispat Inland officials expect the company’s first quarter shipments to be higher than the fourth quarter. The company is also anticipating higher selling prices along with higher raw material costs.
Officials say the combination of higher shipments and stable margins should result in better operating earnings in the first quarter of 2005 as compared to the fourth quarter of 2004.
Ispat Inland’s fourth quarter net income at $41.7 million was down from the third quarter net income of $119.9 million.
New York-based steel analyst Charles Bradford said he believes the difference in income was due to many customers buying less steel in the last three months of the year. The fourth quarter is also traditionally slower in the industry.
“There were major problems and I think the whole market had the same problems,” Bradford said about the fourth quarter. “It was not a very good environment for the steel industry because their customers had too much inventory.”
Ispat Inland’s average selling price increased by 34 percent to $562 a ton in 2004 from $419 per ton in 2003.
The average selling price increased by 50 percent, at about $631 per ton in the last three months of 2004 compared to $420 per ton in the fourth quarter of 2003.
Ispat Inland shipped 5.6 million tons of steel in 2004, an increase of 314,400 tons compared to 2003 shipments.
