AK Steel Holding Corp. on Monday said it plans to close the largely-idled Ashland Works facility in Ashland, Kentucky by the end of the year.
More than three years ago, the West Chester Twp.-based company idled most of its Ashland Works operations, including the blast furnace, but continued to operate a single hot dip galvanizing coating line with 230 employees.
AK Steel said it plans to increase its operating efficiency and lower its costs by completing the shutdown of the blast furnace and steelmaking operations within the next several months, and by working with its customers to transition products coated at Ashland Works to other AK Steel operations in the United States with available capacity before the end of the year.
Those are measures expected to increase those operations’ utilization rates. Production volumes and customer shipments are not expected to be impacted by the closure. The company will offer employees at the Ashland Works site open jobs at its other facilities, it said.
Once fully implemented, these actions are expected to result in annual savings of over $40 million, according to AK Steel.
“These savings, combined with the positive impact of the Administration’s policies to address unfair trade practices, will help facilitate the company’s longer term growth plans,” the company said in a release. “It will also help maintain and enhance the company’s more cost effective steelmaking facilities and further drive growth and innovation.”
AK Steel said it expects to invest approximately $650 million in maintenance at its facilities in 2019 and make another $170 million to $190 million in capital investments.
Over the last five years, the company has invested more than $5 billion in its steelmaking assets and downstream businesses, including over $4 billion in maintenance and capital investments and $1.1 billion in acquisitions.
Also on Monday, AK Steel reported fourth-quarter net income of $33.5 million, after reporting a loss in the same period a year earlier.
On a per-share basis, the company said it had net income of 11 cents. Earnings, adjusted for non-recurring costs, came to 16 cents per share. The results topped Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 12 cents per share.
The steel producer posted revenue of $1.68 billion in the period, which fell short of Street forecasts. Five analysts surveyed by Zacks expected $1.7 billion. For the year, the company reported profit of $186 million, or 59 cents per share. Revenue was reported as $6.82 billion.
AK Steel expects full-year earnings to be 51 cents to 57 cents per share.
In the final minutes of trading on Monday, the company’s shares hit $2.70. A year ago, they were trading at $6.34.