Stelco Holdings Inc.

Thank you for standing by and welcome to the Stelco Holdings Incorporated third quarter 2022 earnings call. My name is Sam and I'll 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 one on your telephone keypad at any time. I'll now hand the call over to Trevor Harris with Stelco. Trevor.

Good morning, everyone, and welcome to Stelco's quarterly earnings conference call. Speaking on the call today to discuss our results for the third quarter of 2022 will be Alan Kastenbaum, 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 third 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 the statements made today, so do not place undue reliance on 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 the call to read the legal disclaimers on page two of the accompanying earnings presentation, and also to refer to the risks and assumptions outlined in Stelco's public disclosures. In particular, the third quarter 2022 management's discussion and analysis sections relating to forward-looking information and risk 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 also 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 re-queuing. With that, I would now like to turn the call over to Alan.

Thank you, Trevor, and good morning, everyone. Through the third quarter of 2022, Stelco was once again able to demonstrate our resilience and take full advantage of our structural cost advantage while at the same time delivering positive returns to our valued shareholders. For the seventh consecutive quarter, we emerged as the North American industry leader with a 29% adjusted EBITDA margin. For context, the next closest margin was 25% and the industry average was 17%. This is a significant achievement that was accomplished in the face of significant market headwinds driven by deteriorating pricing and inflationary pressures on our input costs. Moreover, we were able to increase our volume of shipments over the previous quarter and utilize our low cost advantage to deliver strong adjusted EBITDA. This success has put Stelco in a position to demonstrate once again the strong alignment between senior management and our co-investors and return capital to us and them through dividends and share repurchases. In addition to increasing our regular dividend by 40% to 42 cents per share this quarter, we are also pleased to announce a special dividend of $3 per share that will return an additional $165 million of capital to our valued shareholders. This in addition to the repurchase and retirement of approximately 29% of the shares that were outstanding at the start of this year, including 17 million shares or 25% in Q3 and the current quarter alone. We continue to lead the industry in return of capital to shareholders as a percentage of our market capitalization. And with the dividends announced today, we will have returned $1.8 billion in since we went public in November of 2017. Notwithstanding our success to date, we are focused on the challenges that lie ahead with market conditions that we expect to remain challenging in the near term. While inflation has had an impact on many of our cars, we are starting to see that abate with some input prices, especially for coal, natural gas, and alloys beginning to turn downwards. Stelco will continue to explore every opportunity to improve our industry-leading cost structure and take advantage of the more than $900 million of capital investments we have made into our facilities since 2017. Most recently, during the third quarter, we began to realize the benefits from both our upgraded Coke battery and our new electricity cogeneration facility, which commenced full operations. and will provide us with excellent opportunities to improve productivity and reduce both costs and our carbon footprint. During the quarter, we also successfully reached new five-year agreements with our unionized employees that will ensure stability in our workforce as we work together to navigate these challenging times. The inflationary environment that is impacting our business is also impacting our employees personally. And I am pleased that we were able to work with the union leadership and members to reach agreements that protect both our workers and their families, as well as the company. I look forward to continuing to work together with our valued union partners to keep SELCO the leader in the North American steel industry. As we move forward, we will not deviate from the successful strategy that has continuously delivered strong results for our business. Our core principles and values are strong. We maintain a strong balance sheet, which will give us operational, strategic, and capital flexibility. We will utilize our tactical flexibility model to pursue the highest possible margins across all product lines, from pig iron to coated products, and we will deploy our capital in a responsible manner that benefits all of our shareholders. We have worked hard to unlock the potential of our business, and established Stelco is not only a low-cost fuel maker in North America, but also as an attractive investment for our shareholders, and we will continue to work on these principles. With that, I will turn to Paul and ask that he provide some additional comments regarding our financial performance.