Stelco Holdings Inc.

Good morning and thank you for attending today's Stelco Holdings Incorporated first quarter 2022 earnings call. My name is Sam and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star followed by one on your cell phone keypad. This time, I'd now like to turn the call over to our host, Trevor Harris of Stelco. Trevor.

Thanks, Tim. Good morning, everyone, and welcome to Stelco's quarterly earnings conference call. Speaking on the call today to discuss the results for the first quarter of 2022 will be Alan Kestenbaum, our Executive Chairman and Chief Executive Officer, and Paul Scherzer, our Chief Financial Officer. Yesterday, after the market closed, we issued a press release overviewing Stelco's financial results for the first quarter of 2022. This press release, along with the company's financial statements and management's discussion and analysis, have been posted on CDAR and on our investor relations website at investors.stelco.com. We have provided a link to the presentation referenced on today's call on our website as well. I'd like to inform everyone that comments made on today's call may contain forward-looking statements, which involve assumptions which have inherent risks and uncertainties. Actual results may differ materially from statements made today, so do not place undue reliance upon them. Stelco management disclaims any obligation to update forward-looking statements except as required by law. With that in mind, I would ask everyone on today's call to read the legal disclaimers on page 2 of the accompanying earnings presentation and also to refer to the risks and assumptions outlined in Stelco's public disclosures. In particular, the first quarter 2022 management's discussion and analysis sections relating to forward-looking information and risks and uncertainties, as well as our filings with securities commissions in Canada. The appendix of our presentation and the non-IFRS performance measures and review of non-IFRS measures of our MD&A provide definitions and reconciliations of the non-IFRS measures that we use today. Please note that all dollar figures referred to on today's call will be in Canadian dollars unless otherwise noted. Following today's prepared remarks, Alan and Paul will be taking questions. To maximize efficiency, we'd ask that all participants who would like to ask a question please limit themselves to one question and one follow-up before recueing. With that, I'd now like to turn the call over to Alan.

Alan? Thank you, Trevor, and good morning, everyone. Following up on the most successful financial year in the history of our company was always going to be a challenge. But once again, our team delivered outstanding results for our shareholders. The first quarter of 2022 was our most profitable opening quarter of all time. Our business continues to lead our industry peers with an adjusted EBITDA margin of 44%. While the $402 million of adjusted EBITDA we generated was down 40% in the previous quarter, it represents 117% improvement over the first quarter of 2021. The total EBITDA generated by our business over the last 12 months now stands at over $2.2 billion. In addition to our industry-leading margin, we were able to generate $906 million in revenue and convert that into $262 million in net income for the quarter, a 120% improvement over the first quarter of 2021, although down from over $500 million in Q4 of last year. Our adjusted net income over the last 12 months stands at just over $1.8 billion. Our exceptional financial performance has afforded us the opportunity to continue to reward our valued shareholders. During the quarter, we surpassed the $1 billion mark with respect to total capital return to our shareholders since our IPO in 2017, more than four times what was raised in our IPO. Relative to our market cap, we continue to be the leader amongst publicly traded steelmakers and downstream steel companies across North America. The alignment of our management team with our shareholder base continues to be an unprecedented strength for our company, and we are exceptionally proud to have reached this milestone. Despite the fact that the first quarter began with some uncertainty and downward pressure on steel prices and softer demand than in 2021, Since the end of the first quarter, we have seen an improvement in end market demand as well as restocking at the distribution level, which taken together with a significant rise in scrap prices affecting the cost structure of many of our competitors have improved prices and our anticipated shipments for Q2. We will also mark in Q2 two more milestones with respect to our strategic capital plan that will provide us with further cost advantages over our competitors. Last month, we completed the extensive rehabilitation and upgrade of the Lake Erie Works coke battery and resumed the production of coke at the facility. The extensive 12-month project included the installation of best-in-class process and production control systems and will contribute to not only more efficient production of coke to support our steelmaking operations, but also will improve SELCO's carbon footprint. Later this month, we expect to begin commissioning of our 65 megawatt electricity cogeneration facility. Talk about good timing. Together, these projects will further improve our cost structure, reduce our emissions profile, and improve the overall efficiency of our operations. All of this has been accomplished without ever wavering from our commitment to maintaining a strong and flexible balance sheet and our low to no debt philosophy and tactically flexible approach to our business. The returns to our shareholders and our strategic capital plan have been funded with cash generated from operations and without acquiring any long-term debt or issuing any stock. In fact, we ended the first quarter with almost $800 million in cash and the balance continues to grow. As the rest of 2022 unfolds and markets continue to evolve, one thing remains certain. Stelco will continue to be flexible and adapt to the changing needs and dynamics of the market. We will hold true to the core principles that have guarded our success. We will keep our balance sheet strong, pursue opportunities to improve our industry leading course position, and deploy our capital to the benefit of our investors. In the five years our team has managed this business, we have delivered strong results at every point of the market cycle and made the necessary investments to ensure the long-term stability of our operations. That is a track record that I am proud of and one that I and our entire management team are focused on continuing. With that, I will turn to Paul and ask that he provide some additional comments regarding our financial performance.