Russel Metals reports increased net earnings in Q3

Friday, 05 November 2021 20:42:05 (GMT+3)   |   San Diego
       

Russel Metals Inc. announced third quarter results this week, reporting $131.6 million in net earnings, compared to $18.2 million in Q3 2020 and $118 million Q2 2021. Total revenues in Q3 2021 totaled $1.1 billion, compared to $615 million in the prior year and $1.07 billion in the prior quarter.

In a press release, the company said each of its business segments continued to generate strong operating profit as compared to the same quarter of 2020 and the 2021 second quarter. In the 2021 third quarter, the metals service centers segment reported near record operating profits and returns, as this segment continued to maximize margin opportunities from the strong market conditions and realized the benefits from the company’s value-added processing initiatives.

The steel distributors segment continued to benefit from strong demand, higher steel prices and low inventories in the supply chain and reported growth in both revenues and operating profit, the company said. In the energy products segment, the continued recovery of oil and natural gas prices led to improved revenues from field stores and supported the profitable liquidation of the US OCTG/line pipe inventory as the company exits this segment of the industry.

The company said steel prices continued to rise in the 2021 third quarter. Metals service centers experienced an increase in selling price per ton of 87 percent compared to the 2020 third quarter and 19 percent compared to the 2021 second quarter. Tons shipped in metals service centers increased 1 percent from the same period in 2020 but decreased by 12 percent from the 2021 second quarter, due to the seasonally slow summer months and the Quebec construction holiday. Steel distributors experienced an increase in demand and selling price per ton due to continued low inventory levels in the supply chain and product shortages. Demand in the energy products segment continues to recover, the company said.

As for an outlook, the company said steel availability has improved modestly and inventory in the supply chain has increased early in the fourth quarter, as steel mills return from their maintenance outage period. Russel Metals expects this modest improvement to continue for the balance of the quarter. The company also said demand is expected to remain strong for the remainder of 2021 and thereby result in a favorable supply and demand balance. The company expects margins to retreat modestly in the fourth quarter of 2021 as a result of higher average cost of inventories.


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