Russel Metals reports higher net income in Q1

Wednesday, 02 May 2018 21:06:12 (GMT+3)   |   San Diego
       

Toronto, Ontario-based Russel Metals Inc. reported net income of $38 million in Q1 2018 on increased revenues of $931 million, compared to net income of $30 million in the first quarter of 2017. In a press release, the company said higher steel prices and volumes led to higher gross margin dollars, and that growth, along with our operating efficiencies, led to improved operating profits in all segments.

First quarter revenues at the company’s metals service centers increased 18 percent to $455 million compared to the same period in 2017, as same store tons shipped were approximately 7 percent higher.  The average selling price improved 8 percent over first quarter 2017 and 5 percent over 2017 fourth quarter due to steel price increases and continued growth in value-added processing. 

First quarter 2018 revenues in the energy products segment increased 13 percent to $382 million compared to $339 million in the 2017 first quarter due to increased valves and fittings revenues at the company’s North American field stores, increased line pipe activity and improved pipe prices.  Drilling activity in Canada was slightly lower than the 2017 first quarter which impacted Russel’s Canadian downhole operations. 

Revenues in Russel’s steel distributors segment increased by 21 percent to $94 million in the 2018 first quarter compared to first quarter of 2017 reflecting higher North American steel prices and stronger demand in the Canadian operation. 

John G. Reid, President and COO, commented, "Steel prices continued to improve throughout the quarter benefiting our metals service centers and steel distributors which also enjoyed improved demand.  Details of the 232 trade actions in the US are coming into focus around exemptions and quota announcements that to date have improved the overall mill utilization rates and pricing.  We continue to expand our geographic footprint and systematically invest in our value-added processing capabilities."

Reid continued, "Our energy products operations benefited from the pricing recovery, improved demand and better industry-wide inventory management.  US line pipe projects have been particularly robust as well as continued growth in our field store operations.  The extent of the duration of the seasonal road closures could impact certain of our Canadian energy products operations.  Entering the second quarter, we remain encouraged with current demand and pricing levels."


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