Steel Dynamics Inc. reported net income of $398 million, compared with net income of $153 million in the prior-year quarter. Through nine months, net income increased 94.5 percent to $988 million.
Third-quarter net sales totaled $3.2 billion, up from $2.4 billion in the year-ago period. Year-to-date sales increased 23.6 percent year over year to $8.9 billion at quarter’s end.
"The team delivered a tremendous third quarter performance, once again attaining numerous operational and financial milestones," said Mark Millett, president and CEO of SDI. "Our third quarter 2018 income from operations of $532 million and adjusted EBITDA of $626 million were both record highs for the company.”
Millett said the company’s strong financial performance was the result of record steel shipments, average steel selling price improvement and resulting metal spread expansion across SDI’s steel operations.
And while underlying domestic steel demand remained strong, Millett added that there was some temporary hesitancy in flat-roll order activity due to customer sentiment and increased hot-roll coil import levels. “However, demand from major steel consuming sectors was steady, including construction, automotive and energy,” he said.
Operating income for the company's steel operations increased 7 percent sequentially in the quarter to a record $577 million, as the average product selling price for SDI's steel operations increased $56 to $988 per ton.
Operating income attributable to the company's flat-roll steel operations increased 5 percent sequentially, operating income from the company's long product steel operations increased 17 percent and operating income from the company's metals recycling operations decreased 30.8 percent sequentially to $18 million.
SDI's fabrication operations recorded third-quarter operating income of $13 million, compared with $14 million in the second quarter. Continued higher average steel input costs offset record high shipments and improved average selling values.
Looking ahead, Millett said the company is confident that macroeconomic and market conditions are in place to benefit domestic steel consumption in 2019.
"Based on strong domestic steel demand fundamentals and customer optimism, we believe steel consumption will continue to be strong,” he said. “In combination with our expansion initiatives, we believe there are firm drivers for our continued growth.”
Millett noted that SDI is excited about the recent Heartland acquisition, saying integration of the company is going well and adding that the expectation to reach an annual run-rate of between 800,000 tons and 900,000 tons by mid 2019 is on track.
"We continue to strengthen our financial position through strong cash flow generation and the execution of our long-term strategy,” he said. “We are well-positioned for growth, and remain focused on delivering shareholder value through organic and transactional growth opportunities."