Toronto, Ontario-based Russel Metals reported Thursday net income of $66 million for the second quarter of 2018, compared to net income of $33 million in the second quarter of 2017. Revenues in Q2 totaled $978 million, compared to $817 million in Q2 2017.
In a press release, the company said significant increases in selling prices at all operations resulted in margin improvements including inventory holding gains in the quarter. Robust economic activity led to increased volumes, according to Russel Metal.
Revenues in the company’s metals service centers increased 35 percent to $562 million for the quarter compared to the same period in 2017. Same-store tons shipped in the second quarter of 2018 were approximately 9 percent higher than the second quarter of 2017. The average selling price improved 17 percent over second quarter 2017 reflecting mill price increases and continued growth in value-added processing. Gross margins were 25.5 percent compared to 21.6 percent in the second quarter of 2017. Operating profits of $57 million were more than double the $24 million reported in the same quarter in 2017 due to stronger demand and selling prices.
Revenues in the energy products segment increased 8 percent to $320 million compared to $296 million in the 2017 second quarter. Revenue increases were due to higher field store activity and large U. line pipe projects. Gross margins were 20.9 percent compared to 18.7 percent for the 2017 second quarter. This segment had operating profits of $28 million compared to $22 million in the same quarter last year.
Revenues in the steel distributors segment decreased by 9 percent to $92 million compared to $101 million in the 2017 second quarter due to lower volumes as trade concerns resulted in cautious buying by customers in this segment. Gross margins were 26.8 percent compared to 19.0 percent due to stronger selling prices. Operating profits were $15 million compared to $10 million in the 2017 second quarter.
John G. Reid, President and CEO, commented, "All of our businesses performed extremely well in the second quarter by adapting to the changing business environment. The continued uncertainty around steel tariffs and trade disruptions has resulted in the realignment of North American supply channels which our team has navigated exceptionally well."