SDI Reports Improved Profits in First Quarter
By Metal Center News Staff
on Apr 19, 2018
Steel Dynamics Inc., Fort Wayne, Ind., reported net income of $228 million in the first quarter, an increase of 13.4 percent compared with the same quarter last year. Net sales of $2.6 billion were up 8.3 percent from first-quarter 2017.
Net income declined 25 percent from the fourth quarter, while sales increased 12.9 percent.
"Our first-quarter 2018 income from operations increased 65 percent sequentially to $323 million, with adjusted EBITDA of $400 million. During the first quarter, we saw improved demand and product pricing across the entire steel platform,” said Mark D. Millett, president and CEO. “The increase in earnings was principally driven by our flat roll operations, as improved demand and pricing supported meaningful volume and margin expansion. Domestic steel consumption remained strong from the automotive and construction sectors, while energy and general industrial demand continued to grow.”
First-quarter 2018 operating income for the company's steel operations increased 63 percent sequentially to $338 million, based on a 7 percent increase in shipments and metal spread expansion, as average steel product pricing increased more than consumed raw material scrap costs. The first-quarter 2018 average product selling price for the company's steel operations increased $61 to $822 per ton.
Operating income attributable to the company's flat-roll steel operations increased more than 70 percent sequentially, driven by metal spread expansion related to higher selling values and a five percent increase in shipments. Operating income from the company's long product steel operations increased more than 25 percent, a result of improved shipments and metal spread expansion, primarily from the company's Engineered Bar Products and Roanoke Bar divisions.
The company's steel production utilization rate was 94 percent in the first quarter of 2018, compared with the estimated domestic steel industry utilization rate of 76 percent.
"We remain confident that current and anticipated macroeconomic and market conditions are in place to benefit domestic steel consumption in 2018," said Millett. "Domestic steel inventory levels remain reasonably balanced. World steel demand and pricing have improved. Based on strong domestic steel demand fundamentals and customer optimism, we believe price momentum and growth in steel consumption will continue during the year.”
Millett also expressed support of the recent steel trade actions from the Trump Administration, which it believes will reduce import levels during the year, while tax reform will provide stimulus for domestic fixed asset investment and growth.