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AK Steel posts 2d-qtr. loss on outage

Keywords: Tags  AK Steel, second quarter, earnings, loss, Middleton, outage

NEW YORK — An unplanned outage at AK Steel Corp.’s Middletown, Ohio blast furnace and a decline in sales to the electrical steel and carbon spot markets led the company to post a $40.4-million net loss for the second quarter of 2013, its eighth consecutive quarterly net loss.

The West Chester, Ohio-based company reported net sales of $1.4 billion on shipments of 1,323,700 tons for the three months ended June 30, amounting to an average selling price of $1,061 per ton. This compared to net sales of almost $1.54 billion on shipments of 1,335,800 tons in the second quarter of 2012 and net sales of nearly $1.37 million on shipments of 1,289,800 tons for the first quarter of 2013.

“The lower shipments for the second quarter of 2013 compared to the year-ago period were primarily due to lower shipments to the carbon spot market and electrical steel market, partially offset by increased shipments to the automotive market,” AK Steel said.

“The unplanned outage of the Middletown Works blast furnace also contributed to a decline in shipments in the second quarter of 2013.”

The $40.4 million loss compares to a net loss of $724.2 million for the second quarter of 2012, though that figure included a non-cash income tax charge of $735.6 million.

The quarterly average selling price of $1,061 per ton represented an 8-percent decrease from the second quarter of 2012, which the company attributed to “lower spot market prices for carbon steel products, reduced raw material surcharges and lower selling prices for electrical steel products globally.”

Meanwhile, AK Steel announced that it restarted the blast furnace at Middletown Works on July 12. The furnace had been taken offline following an unexpected mechanical failure on June 22.

The company’s second quarter results for 2013 included a charge of $6.2 million for the unplanned outage, with the company estimating its total uninsured portion of losses in the second half of 2013 will be between $12.0 million and $17.0 million.

AK Steel also noted that it expects to incur additional expenses related to the unplanned Middletown blast furnace outage in the third quarter.

“Excluding the blast furnace repair costs, both planned and unplanned, AK Steel’s second quarter performance improved compared to our first quarter,” AK chairman, president and chief executive officer James L. Wainscott said in a statement.

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