SDI Reports Record Sales in 2017
By Metal Center News Staff
on Jan 31, 2018
It was a record year for Steel Dynamics Inc. in 2017, with the Fort Wayne, Ind.-based company reaching the high-water mark in sales and shipments.
SDI reported annual net income of $813 million last year on net sales of $9.5 billion. Compared with net income of $382 million on $7.8 billion in total sales the prior year, the steelmaker saw profits more than double in 2017.
"The performance of the entire Steel Dynamics team was exceptional this year," said Mark Millett, president and CEO of SDI. "We performed at the top of our industry, both operationally and financially, and most importantly, we did it safely.”
Steel shipments of 9.7 million tons were among the annual records set by SDI last year, increasing 5.2 percent from 2016. The company also reported record annual fabrication shipments of 627,274 tons in 2017, compared with 562,725 tons the prior year.
"Our fabrication platform also had a solid year with annual 2017 operating income of $87 million, achieving record shipments which substantially offset margin compression caused by higher average raw material steel costs," Millett said, who added that SDI’s fabrication order backlog and customer sentiment remain strong. “We believe this is a positive indication that the nonresidential construction market is continuing to strengthen."
In the fourth quarter, SDI reported net income of $305 million, compared with net income of $20 million in the year-ago period. Net sales totaled $2.3 billion in the quarter, a 21.1 percent increase from the prior year’s fourth quarter.
The company also reported a 26 percent decrease in operating income sequentially for its steel operations in the fourth quarter due to a product mix shift, metal spread compression and a 4 percent decrease in shipments. Operating income attributable to the company's flat roll products dropped 30 percent sequentially in the fourth quarter based on prolonged outages, lower shipments and metal spread compression. Operating income from long products also decreased, down 8 percent in the quarter. Fourth-quarter operating income from the company's metals recycling operations increased sequentially to $22 million.
"In spite of the continuation of elevated levels of steel imports, which were over 15 percent higher than in 2016, the domestic steel industry benefited in 2017 from an improvement in underlying demand, as the automotive sector remained strong, and the construction and energy sectors continued to improve,” Millett said.
Looking ahead, Millett said that SDI expects current and anticipated macroeconomic and market conditions to benefit domestic steel consumption in 2018. Executives anticipate steady steel consumption from the North American automotive sector, as well as continued additional growth in the construction and energy sectors.
“We believe the recent tax reform will also provide a stimulus for additional domestic fixed asset investment and growth,” Millett said. “In combination with our own SDI expansion initiatives, we believe there are firm drivers for growth in 2018.”