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Economy

Stelco still turning big profits despite stiff U.S. tariffs

Prime Minister Justin Trudeau said on Wednesday that the Trump administration's tariffs on Canadian steel are hurting U.S. workers and that there are "strong voices" in the U.S. against the steel tariffs.

Despite harsh tariffs from the United States, Stelco is still making money.

READ MORE: Freeland says she pushed for end to steel, aluminum tariffs in meeting with Nancy Pelosi

Stelco Holdings Inc. reported net income of $108 million on revenue of $648 million for the quarter ended Dec. 31, 2018, compared with net income of $16 million on revenue of $452 million the same period in 2017.

The company reported increases in both the average selling price of steel and shipping volumes.

According to Alan Kestenbaum, Stelco’s executive chairman, the company’s business model allowed flexibility despite the U.S. tariffs.

“By executing our tactical flexibility model, during the fourth quarter we reduced our tariff related costs by more than 41 per cent sequentially, from $39 million in the third quarter to $23 million in the fourth quarter,” Kestenbaum said.

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“We are continuing with efforts to reduce our tariff exposure into 2019 and fully support the Canadian government’s efforts to eliminate the 232 tariffs against Canadian steel. We welcome and appreciate the Canadian government’s implementation of various measures including provisional safeguard measures in Q4 2018, that have helped to prevent a surge of offshore imports into the Canadian market.”

READ MORE: Fairfax Financial buys stake in Hamilton’s Stelco

Kestenbaum says the Hamilton-based steel producer had full-year revenue of $2.46 billion in 2018, up from $1.6 billion the year before.