March 1, 2017

Russel Reports $63 Million Profit in 2016

Russel Metals, Inc., Mississauga, Ontario, reported net income of $63 million in 2016, a reversal from the $88 million loss posted in 2015. Full-year sales for the Canadian distributor declined 17.1 percent to $2.58 billion.

In the fourth quarter, Russel reported net income of $23 million, compared with a net loss of $135 million during the same period in 2015. Quarterly sales fell 2.8 percent to $654 billion.

"I am pleased that the pricing environment improved late in 2016,” said Brian Hedges, CEO. “Our increased profitability in 2016 reflects the constant attention of our operators to match expenses with business activity and their focus on managing the working capital levels of their businesses."

The company’s metal service center segment saw revenues increase 1.0 percent to $330 million in the quarter, due to a small increase in the average selling price. Tons shipped were consistent with fourth-quarter 2015.

Fourth-quarter sales in the energy products segment decreased 12 percent to $242 million, driven by reduced activity in the sector with North American rig counts hitting historic lows. Despite the declines, Russel reported operating profits of $5 million.

The company’s steel distributors segment reported sales of $79 million, an 11 percent increase from the same quarter in 2015. The increase was driven by a 16.1 percent improvement in gross margin as a percentage of revenue.

"In the 2016 fourth quarter, we optimized the utilization of two operations through the sale of properties,” Hedges said. Also during the quarter, Russel acquired Jackson Pipe & Steel, a Texarkana, Texas-based distributor now operated by subsidiary JMS Russel Metals Corp.


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Wednesday, October 18, 2017