Russel’s First-Quarter Results Match 1Q 2011 > Metal Center News

Russel’s First-Quarter Results Match 1Q 2011

May 16, 2012

Russel Metals Inc., Mississauga, Ont., reported first-quarter net earnings of $33 million, matching its 2011 performance. Earnings improved 13.7 percent from fourth-quarter 2011.

Russel’s net sales totaled $802.9 million during the first quarter, an increase of 22.1 percent compared to the previous year and 12.6 percent better than the previous quarter.

Revenues in the company’s metals service center segment increased 18 percent to $428 million in the first quarter. Service center volumes were up 14 percent compared to first-quarter 2011 and 16 percent compared to the previous quarter. Operating profit as a percentage of revenues improved to 7.5 percent from 5.7 percent in the fourth quarter last year.

“Operating profit for the first quarter in our metals service center segment was generated by strong demand levels, unlike the comparable first quarter of 2011 that experienced inventory-holding gains. The growth in the first quarter reflects a continued healthy recovery in the industrial segment of the North American economy. In Canada, the western provinces were buoyed by high oil prices, which led to a stronger recovery compared to the eastern provinces,” said President and CEO Brian Hedges.

Revenues in the company’s energy tubular products segment increased 23 percent from a year ago to $275 million. Increased volume as a result of large line pipe orders improved operating profits to $19 million.

Strong demand was also experienced in Russel’s steel distributors segment, which had a 42 percent increase in 2012 first-quarter revenues to $99 million. Operating profits for the first quarter of 2012 increased by $1 million to $10 million compared to first-quarter 2011.

In other news, Russel Metals completed the acquisition of Siemens Laserworks Inc., a value-added laser processing company with facilities in western Canada. The $27.5 million acquisition includes facilities in Saskatoon and Edmonton. Siemens Laserworks will operate under its trade name, as a division of Russel Metals Inc. The entire management team will remain in place, led by Shawn Henschel, the current president and CEO.

"We are extremely pleased to add Siemens Laserworks to our prairie service center operations. The opportunity to add a market leader in our core service center segment fits perfectly with our goal of acquiring well-run market leaders,” Hedges said.