Russel’s Sales Up in Third Quarter
By Metal Center News Staff
on Nov 9, 2022
Russel Metals Inc. reported net sales of $1.3 billion in the third quarter, a 14.6 percent increase compared with the same quarter in 2021. For the year to date, the Canadian service center company reported net sales of nearly $4 billion, up 29.7 percent compared with the prior year.
Net earnings in the quarter totaled $91 million, down 31 percent from third-quarter 2021. Net earnings for the year to date totaled $314 million, a 0.5 percent decline from the first three quarters last year.
The company’s metals service centers segment reported revenues of $865 million and profits of $67 million, with value-added processing initiatives and solid market share offsetting lower steel prices. The selling price per ton was up 4 percent compared with the third quarter of 2021 but down 6 percent compared with the prior quarter. Tons shipped in metals service centers increased 9 percent from the same period but decreased 5 percent from the 2022 second quarter due to both seasonal factors and customer destocking amid the recent price volatility.
The company’s steel distributors segment reported comparable revenues with the second quarter, but generated lower margins due to the moderation of steel prices.
The energy segment saw higher revenues, stronger margins and operating profits that more than doubled compared to the same quarter of 2021 due to the continued recovery of the energy sector.
Russel executives announced targeted discretionary investments of approximately $30 million per year related to value-added equipment projects. These initiatives have been under way for several years and are expected to continue for several more years. In the 2022 third quarter, the company advanced several value-added projects, including ones in Saskatchewan, Alberta and Quebec.
In terms of facility modernizations, Russel has targeted $50-75 million of investments in the coming years for projects focused on consolidating multi-site regions into larger and modern facilities. In the quarter, Russel approved a project in Saskatoon, Saskatchewan, which will involve a net investment of approximately $7 million. This project is targeted for completion in early 2024.