CMC reports net earnings for fiscal Q4 and full-year

Thursday, 15 October 2020 19:51:58 (GMT+3)   |   San Diego
       

Commercial Metals Company announced financial results for its fiscal fourth quarter and year ended August 31, 2020. Earnings from continuing operations were $67.8 million in the fourth quarter, compared to $85.9 million in the prior year period. For the full year, earnings from continuing operations were $278.3 million, compared to $198.8 million in the prior year.

The North America segment generated adjusted EBITDA of $174.2 million for the fourth quarter of fiscal 2020, an increase of 14 percent compared to $152.5 million in the prior year period. The company said the improvement reflects strong management of non-raw material costs at each stage of its vertically integrated value chain. Cost performance at the mills was particularly strong, CMC said, with a meaningful portion of the improvement driven by the recent decision to curtail melting operations at Steel California and supply billets from lower cost plants. Lower operating costs at downstream locations also contributed to the improved performance.

Shipment volumes of finished goods, which includes steel products and downstream products, were flat compared to the prior year quarter, CMC said, adding demand for rebar from the mills remained strong, growing year-over-year, supported by healthy construction backlogs across the company’s customer base. As a result of gains in market share, shipments of merchant bar were flat compared to the prior year period, as underlying consumption declined across the industry. Downstream product volumes declined modestly year-over-year due largely to the impact of weather challenges in the Gulf Coast and Texas markets, CMC said.

"We expect finished steel volumes for our North America and Europe operations to follow typical seasonal trends in the first fiscal quarter, with some negative impact in North America due to storms in the Texas and Gulf Coast markets," said Barbara R. Smith, Chairman of the Board, President and Chief Executive Officer. "Shipments of steel and downstream products in the near-term should be supported by our solid construction backlog.  We anticipate margin headwinds in the first quarter within North America due to the recent rise in scrap costs mitigated, in part, by steel price increases that became effective during the quarter. The market for long products in Europe is expected to remain challenged due to elevated import levels. However, demand appears solid, driven by construction sector resilience, and rebounding Central European industrial production."


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