Stelco CEO on Pricing: "The Trend is Your Friend"

Canadian steel producer Stelco is seeing the impact of its upgraded smart blast furnace, reporting production records and higher profit in the first quarter due to higher steel prices and increased value-added shipments of cold rolled and coated products. Compared to the previous quarter, revenue increased 57%, shipments jumped 38% and operating income soared a whopping 328%, the company said.

Stelco expects to generate a significant amount of free cash flow this year—to the tune of CAD $2 billion. CEO Alan Kestenbaum touted the company’s opportunity to generate enormous amounts of cash without incurring debt given the favorable business conditions. The goal is to have a clean balance sheet with no debt that should get Stelco’s relatively low share price up to a competitive level. “We want to get the valuation of the company to where it belongs,” he said.