Geneva Steel reported net income of $7.1 million or 47 cents per common share for the first fiscal quarter ended Nov. 30, down from $11.8 million or $1.01 per share for the same quarter last year.
"Geneva, in tandem with the steel industry, realized lower average selling prices, which was the primary reason for the decrease in net income in the first fiscal quarter of 1991 as compared to the same fiscal quarter of 1990," said Joseph A. Cannon, president.Cannon said net income also was affected by higher coal and pellet costs, higher labor costs as required by the labor contract, and higher freight costs. In addition, production levels in September 1990 were lower because of mill downtime during the repair of reheat furnaces.
Sales and tons shipped were $124.3 million and 340,000 tons, respectively, compared with $132.2 million and 344,000 tons, respectively, for the same quarter of last year.
Cannon said Geneva is on schedule in completing its $239 million modernization program, which includes installation of two basic oxygen process furnaces (Q-BOP), a coilbox and a continuous caster, along with other rolling mill improvements. The measures are intended to reduce operating costs and improve the quality of Geneva's finished steel products.
During the quarter, Geneva and Linde, a division of Union Carbide Industrial Gases Inc., announced the construction of a $25 million oxygen plant that will supply oxygen and other gases for the operation of the new Q-BOP facility. The on-site plant, which Linde will build and operate, is scheduled to start up in the third calendar quarter of 1991.