Russel Metals’ Income Climbs to $46M in Q4
By Metal Center News Staff
on Feb 9, 2019
reported a net income of $46 million CAD in the fourth quarter, compared with a net income of $28 million in the year-ago period. Total net income in 2018 increased to $219 million from $124 million in 2017.
The Toronto-based metal distributor posted fourth-quarter revenues of $1.1 billion, up from $825 million in fourth-quarter 2017, while full-year revenues increased 26.4 percent over 2017 to $4.2 billion.
"We are extremely pleased with the excellent results in 2018 and would like to commend all our operations for their tremendous execution during the fourth quarter and throughout the year,” said John Reid, president and CEO. “Our strong earnings were a result of their ability to utilize local market knowledge to react quickly to the changing environment. In addition, growth in both our value-added processing and our U.S. energy field stores and our distributor’s ability to source product through international trade expertise greatly contributed to our outstanding year.”
Russel also posted positive results in all three of its operating segments, including the metals service centers segment, which increased revenues 25 percent in the fourth quarter to $524 million. The company added that steel price increases and continued growth in value-added processing resulted in a 28 percent improvement in the average selling price over the fourth quarter of 2017.
Revenues in the energy products segment increased 44 percent in the quarter to $432 million, due primarily to U.S. line pipe projects and higher oil field service store activity. Revenues in the steel distributors segment increased 50 percent in the quarter to $157 million. The company credited higher steel prices and stronger demand with the segment’s performance.
"Although steel prices are still at healthy levels to date in 2019, they are experiencing some downward pricing pressure,” Reid said. “Specifically, flat rolled prices are lower as scrap prices have fallen and import spreads offer attractive opportunities as quotas reset. Plate continues to be the strongest North American product due to strong demand levels. The energy market is seeing a modest pull-back in capital spending due to reduced oil prices.
Reid added that the company expects stable demand and pressure on steel prices in the first quarter of 2019.