AK Steel today released its financial results for the first quarter of 2016, reporting a net loss of $13.6 million for the first quarter of 2016, compared to a net loss of $306.3 million for the first quarter of 2015. The net loss for the year-ago first quarter included a charge of $256.3 million to write off the company’s investment in Magnetation LLC.
The company reported a 41 percent increase in adjusted EBITDA to $81.1 million, or 5.3 percent of net sales, for the first quarter of 2016 from adjusted EBITDA of $57.5 million, or 3.3 percent of net sales, for the first quarter of 2015.
Shipments of 1,658,200 tons in the first quarter of 2016 were 5 percent lower than the first quarter of 2015, reflecting the company’s strategic decision to reduce exposure to commodity products. Shipments of hot rolled carbon steel products, most of which were sold into the commodity spot market, declined 34 percent from a year ago. Partially offsetting this decline was a 7 percent increase in higher value coated products that are sold mostly to the automotive market. As a result of reduced volumes and lower average selling prices, net sales for the first quarter of 2016 declined to $1.52 billion from $1.75 billion in the first quarter of 2015.
“We achieved significant improvement from a year ago as we made the strategic decision to reduce our exposure to commodity spot markets, optimize our footprint and focus on higher value products,” said Roger K. Newport, AK Steel’s Chief Executive Officer. “As a result of these actions, our continuous emphasis on operational improvements and relentless attention to cost management, our adjusted EBITDA improved significantly compared to a year ago.”