Timken Steel refrained from providing an outlook for Q4 2020 shipments or earnings considering the uncertainty around the COVID-19 pandemic. However, the company projects its planned 2020 capital expenditure spending will remain in the range of $15-20mn.
During Q3 2020, the alloy steel producer’s sales and shipments improved gradually compared to Q2, in tandem with recovery in the automotive market. Although it noted that demand in other end markets will likely face further headwinds in the short term.
The steelmaker shipped 476,400nt of steel in the first nine months of the year compared with 718,600nt in January-September 2019. Tons shipped in Q3 2020 tallied at 154,300nt (139,978mt), down 26pc from 209,600nt in Q3 2019, due to reduced demand in the industrial, energy, and OCTG billet sectors. Timken also noted its shipped volumes increased by 42pc from Q2 due to stronger automotive sales.
Net sales were $619.5mn in Jan-Sep 2020, down from $981.9mn in the same 2019 interval. The company reported a 25pc decline in net sales at $205.9mn in Q3 2020, compared with $274.2mn in Q3 2019, due to lower industrial and energy demand. Timken recorded a 34pc increase in net sales, however, compared to Q2 as auto demand improved.
By the end of the third quarter, the company maintained a strong cash position and had appropriate liquidity to meet business needs. Timken’s cash balance tallied at $74.8mn during the quarter, following a strong operating cash flow generation of $41.1mn. The company repaid $40mn in remaining debt and total liquidity was $280mn in Q3, up from $28.1mn in Q2.
Net income loss during the first nine months of 2020 was $49.1mn compared to $25.4mn in the same 2019 interlude. Timken’s net income loss was $13.9mn in Q3 2020, compared to a net income loss of $17mn in Q3 2019.
Adjusted EBITDA for the first nine months of 2020 was $17.2mn compared to an adjusted EBITDA of $41.1mn in the same period in 2019. The steel producer’s adjusted EBITDA was $2.6mn in Q3 2020 compared to an adjusted EBITDA loss of $1.4mn in the same quarter in 2019.