Corporation (USS) is reporting a net loss in 2019 of $642 million or $3.75
per diluted share, compared to a net income in 2018 of $1.12 billion or
In the fourth
quarter USS posted a net loss of $680 million or $4 per diluted share,
compared to a net income in the year-ago period of $3.34.
The full-year 2019
results include $609 million in restructuring charges, the company said in a
statement released after deadline on Monday.
“We are pleased to
deliver better than expected results to end the year and are excited to turn
the page to 2020, where we will continue to transition the business towards
our future,” USS President and CEO David Burritt said. “2019 was a year of
notable strategic progress and we took swift action to reposition the
business. We achieved $75 million of run-rate fixed cost reductions, we
demonstrated flexibility by adjusting our 2020 capital spending to
prioritize strategic investments, and we de-risked strategy execution by
raising $1.1 billion of incremental credit.”
“We will take
another step towards our world-competitive ‘best of both’ strategy this year
as we complete two important strategic projects: the electric arc furnace at
Tubular and our XG3 AHSS investment at our PRO-TEC joint venture,” Burritt
added. “These projects will be yet another proof point to the market that
our strategy will deliver cost and capability differentiation that is
valuable to our customers, stockholders, and employees. I have never been
more confident in our strategy that our investments in Big River and Endless
Casting and Rolling are the right priorities. We won’t be the biggest steel
company, but we will be the only ‘best of both’ steel company.”
“Best of Both”
USS announced the
“best of both” strategy in October, with the $700-million purchase of a
49.9-percent ownership interest in the Big River Steel flat-rolled mini
mill, with an option to acquire the remaining 50.1-percent interest within
the next four years. “Our new partnership with Big River is designed to
accelerate our strategy to offer the ‘best of both’ by bringing together the
capabilities of integrated and mini mill production,” Burritt said at the
The “best of both”
strategy also features a $1-billion investment in endless casting and
rolling and cogeneration projects at the Mon Valley Works in Pennsylvania
and a $750-million investment in the hot strip mill and other projects at
To “better align
the company around (those) three core assets within its North American
flat-rolled operating segment,” USS announced in December that it will idle
“significant portions of operations” at its Great Lakes Works in River
Rouge, Mich. The company attributed that decision to weak demand, lower
steel prices, and the new “best of both” corporate strategy.
Steel production is
scheduled to stop at Great Lakes Works on April 1. The hot-strip mill
rolling facility ceased operations prior to the New Year. Approximately
1,545 workers will be laid off.
Outage at Gary
Meanwhile, USS is
planning a 48-day outage in April of the No. 4 blast furnace at Gary Works.
accordingly, will be building up stocks of inventory throughout the first
currently expects the first quarter of 2020 to be the trough for the year
due to the normal seasonality of our mining operations and lower
first-quarter shipments in flat-rolled as the company prepares for the April
blast furnace outage at Gary works,” USS said.
price per net ton of flat-rolled: $753 ($811 in 2018).
--Total USS and
U.S. Steel Europe shipments: 15.05 million net tons (15.74 million in 2018).
capability at U.S. facilities: 67 percent (70 percent in 2018).
steel production: 11.4 million net tons (11.89 million in 2018).
capital expenditures: $943 million ($820 million in 2018).
shipments of flat-rolled to tubular: 258,000 tons (224,000 in 2018).
--Net sales: $12.94
billion ($14.18 billion 2018).
segment earnings before interest and income taxes: $196 million ($883
million in 2018).
--U.S. Steel Europe
segment loss: $57 million (earnings of $359 million in 2018).
loss: $67 million (loss of $58 million in 2018).
segment earnings: $23 million ($55 million in 2018).
earnings before interest and income taxes: $95 million ($1.24 billion in