Russel’s Net Income Up 26.7% in First Quarter
By Metal Center News Staff
on May 4, 2018
Russel Metals, Mississauga, Ontario, reported net income of $38 million in the first quarter, an increase from the $30 million reported in the same period in 2017. Higher steel prices and larger volumes led to higher gross margin dollars.
The company’s net sales increased 15.8 percent to $931 million. Sales were also up 12.8 percent from the prior quarter.
“Steel prices continued to improve throughout the quarter, benefiting our metals service centers and steel distributors, which also enjoyed improved demand. Details of the 232 trade actions in the U.S. are coming into focus around exemptions and quota announcements that to date have improved the overall mill utilization rates and pricing,” said John Reid, president and CEO. “We continue to expand our geographic footprint and systematically invest in our value-added processing capabilities.”
First-quarter revenues in the company’s metal service centers segment increased 18 percent to $455 million, with same-store tons shipped climbing 7 percent. The average selling price improved 8 percent compared with first-quarter 2017 and was up 5 percent from the prior quarter. Operating profits in the segment increased by $7 million to $29 million.
In the energy products segment, revenues increased 13 percent to $382 million due to increased valves and fitting revenues, increased line pipe activity and improved pipe prices. Segment operating profits improved 33 percent to $32 million.
Revenues in Russel’s steel distributors segment increased by 21 percent to $94 million in the first quarter, reflecting higher North American steel prices and stronger demand in the Canadian operation. Segment operating profits increased 37.5 percent to $11 million.
“Entering the second quarter, we remain encouraged with current demand and pricing levels,” said Reid, who assumed his position as CEO with the retirement of Brian Hedges on May 2.