Toronto-based metals service center and distributor Russel Metals Inc. announced today financial results for second quarter ended June 30, 2017.
For the 2017 second quarter, the company reported net income of $33 million on revenues of $817 million compared to net income of $16 million in the second quarter of 2016. Increased volumes in the energy products and steel distributor segments coupled with higher steel prices led to increased gross margins and improved operating profits from the 2016 second quarter.
Revenues in the metals service centers increased 14 percent to $416 million for the quarter compared to the same period in 2016. Tons shipped in the second quarter of 2017 approximated tons shipped in the second quarter of 2016. The average selling price improved 15 percent over second quarter 2016 reflecting mill price increases and continued growth in value-added processing. Gross margins were 21.6 percent compared to 22.9 percent in the second quarter of 2016 as a result of stable steel prices in 2017 compared to rising steel prices in the 2016 second quarter. Operating profits were consistent with the same quarter in 2016.
Revenues in the energy products segment increased 68 percent to $296 million compared to $176 million in the 2016 second quarter. Revenue increases were due to higher rig counts, stronger prices due to the reduction of the industry inventory overhang and a shorter Canadian spring break up. Gross margins were 18.7 percent compared to 16.4 percent for the 2016 second quarter. This segment had operating profits of $22 million compared to $1 million in the same quarter last year as all operations in this segment posted stronger results.
Revenues in the steel distributors segment increased by 25 percent to $101 million compared to $81 million in the 2016 second quarter due to higher volumes and steel prices. Gross margins were 19.0 percent compared to 18.5 percent. Operating profits were $10 million compared to $9 million in the 2016 second quarter.