Russel Metals nearly doubles revenue in Q2

Friday, 06 August 2021 18:47:05 (GMT+3)   |   San Diego
       

Russel Metals Inc. announced financial results for three months ended June 30, 2021. Revenues in Q2 reached $1.07 billion, compared to $588 million in Q2 2020 and $885 million in Q1 2021. Net income for the quarter totaled $118 million, compared to $5 million in Q2 2020 and $81 million in Q1 2021.

In a press release, the company said each of its business segments generated a substantial improvement in operating profit as compared to the same quarter of 2020 and the 2021 first quarter.  In the 2021 second quarter, metals service centers segment reported record operating profits and return on net assets, as this segment continued to maximize margin opportunities from strong market conditions.  The steel distributors segment benefited from improved demand, higher steel prices and low inventories in the supply chain, and reported strong growth in both revenues and operating profit.  In the energy products segment, the recovery of oil and natural gas prices and the relatively mild spring break up in Canada led to improved operating profit in what is typically a seasonally slow second quarter, the company said.

The company said steel prices continued to rise in the 2021 second quarter. Metals service centers experienced an increase in selling price per ton of 53 percent compared to the 2020 second quarter and 19 percent compared to the 2021 first quarter. Tons shipped in metals service centers increased 25 percent from the same period in 2020 and 3 percent compared to the 2021 first quarter. The 2021 second quarter volumes were above the pre-pandemic level due to increased demand. Steel distributors also experienced an increase in demand and selling price per ton due to low inventory levels in the supply chain and product shortages, the company said, adding that demand in the energy products segments continues to recover, albeit at a slow pace.

As for an outlook, the company said overall demand remains solid with strong backlogs, limited inventory in the supply chain and extended lead times expected to continue over the near term.  The positive momentum of steel prices continues into the 2021 third quarter, however, gross margins are expected to moderate due to the rising cost of inventory.  For metals service centers and steel distributors there is typically a seasonal slowdown in July and August due to a reduction in the number of operating days, but overall demand is expected to remain steady, the company said. Energy products continues to recover, consistent with rising energy demand.


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