Commercial Metals Company today announced financial results for its fiscal first quarter ended November 30, 2021. Earnings from continuing operations were $232.9 million on net sales of $2.0 billion, compared to prior year earnings from continuing operations of $63.9 million on net sales of $1.4 billion.
In a press release, the company said demand conditions for CMC's finished steel products in North America remained robust during the quarter, with several key indicators pointing toward continued strength. Downstream bid volumes, a key indicator of the construction project pipeline, increased meaningfully from a year ago, while new contract awards and backlog also experienced growth, CMC said. Demand from industrial end markets trended positively, with most end use applications increasing relative to the prior year.
The North America segment generated record adjusted EBITDA of $268.5 million for the first quarter of fiscal 2022, an increase of 73 percent compared to $155.6 million in the prior year period. This improvement was driven by increased margins for steel products and raw materials, the company said; beneficial impact of increased margins was offset, to a modest extent, by a year-over-year increase in controllable costs per ton of finished steel shipped, which occurred largely from inflationary pressures for freight, energy, and steelmaking consumables.
Shipment volumes of finished steel, which include steel products and downstream products, followed typical seasonal patterns, and were essentially flat to the prior year first quarter volumes, CMC said. Growth in CMC's construction backlog drove a year-over-year increase in downstream shipment volumes, marking the first such increase in eight quarters.
Margin over scrap cost on steel products increased by $202 per ton from the prior year period and $82 per ton compared to the prior quarter. Favorable market conditions lifted the average selling price by $364 per ton compared to the first quarter of fiscal 2021, against a $162 per ton increase in scrap costs.
As for an outlook, Barbara R. Smith, Chairman of the Board, President and Chief Executive Officer, said, "We continue to anticipate strong fiscal year 2022 financial and operational performances. Volumes should remain solid, supported by a growing construction backlog in North America, as well as broad strength across key end markets in both North America and Europe."