CANTON Recovery in the automotive industry has TimkenSteel executives hoping for a better year in 2021.
The company saw steel sales drop last year because of the coronavirus pandemic, as well as continuing weakness in energy markets. But steel demand from the automotive industry improved as 2020 ended and seems promising this year.
Additionally, the company has benefited from steps taken over the past 18 months to reduce costs and provide automotive customers with value-added steel components.
"We're feeling pretty good about it right now," Mike Williams, president and chief executive officer, told stock analysts in a conference call Friday morning. Company executives discussed TimkenSteel's 2020 financial results
TimkenSteel ended the year with a loss of $61.6 million, or $1.38 per share, which was down from the loss of $110 million, or $2.46 per share, in 2019.
The company had a 31.3% drop in revenue during the year with sales of $830.7 million compared with $1.21 billion the previous year.
The fourth quarter saw a loss of $12.8 million, 28 cents per share, compared with $84.6 million, or $1.89 per share, the previous year. Sales of $211.2 million were down 6.9% from $226.9 million in 2019's fourth quarter.
The company said lower annual sales were driven largely by the negative impact of the pandemic on customer demand.
The drop led to the company's decision — announced last week — to indefinitely idle the melt shop and casting operations at the Harrison Steel mill. The move could lead to the layoff of 100 members of United Steelworkers Local 1123.
Because of reduced steel demand, utilization rate of the Harrison melt and casting operations dropped below 25% during 2020, the company said. TimkenSteel now is working to transfer Harrison operations to the melt shop and vertical bloom caster in the Faircrest Steel Mill.
The company expects to save between $15 million and $20 million by idling the Harrison melt and casting operations. Williams emphasized that rolling and finishing operations at the Harrison mill aren't affected by the decision to idle the melt and casting operations.
Meanwhile, new products made at the Eaton facility outside Dayton generated $20 million in revenue last year, and should generate more than $70 million this year. The company began expanding the facility in 2017 and secured a new product line for automotive transmissions.
Tom Moline, executive vice president for commercial operations, said the product line is part of upgrades made in transmission systems. The company expects the business will be there for a while, Moline said.
Williams said TimkenSteel will move forward with efforts to secure customers in commercial steel business segments and continue work to control costs and improve efficiency.
February 27, 2021 at 12:40AM
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TimkenSteel hopes for improvement as end of 2020 sees automotive industry recover - Canton Repository
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