Russel Metals reports lower net income for Q2

Friday, 09 August 2019 20:00:13 (GMT+3)   |   San Diego
       

Toronto, Ontario-based Russel Metals Inc. announced that for the 2019 second quarter, the company reported net income of CAD 31 million ($23.4 million) on revenues of CAD 937 million ($708.3 million), compared to net income of CAD 66 million ($49.9 million) in the second quarter of 2018. In a press release, the company said gross margins in the 2019 second quarter of 18.8 percent were lower than the 24.4 percent gross margins experienced in the 2018 second quarter, which were higher because of the imposition of the US 232 tariffs which led to higher selling prices.

Revenues in the metals service centers decreased 5 percent to CAD 535 million ($404.4 million) for the quarter compared to the same period in 2018. Same store tons shipped in the second quarter of 2019 were approximately 7 percent lower than the second quarter of 2018.

Revenues in the energy products segment decreased 7 percent to CAD 298 million ($225.3 million) compared to CAD 320 million ($241.9 million) in the 2018 second quarter due in part to reduced year-over-year North American rig counts.

Revenues in the steel distributors segment increased by 8 percent to CAD 100 million ($75.6 million) compared to CAD 92 million ($69.6 million) in the 2018 second quarter. The company said its Canadian operation continued to experience higher demand from their customer base due to opportunities presented by the trade disruptions.

John G. Reid, President and CEO, commented, "We achieved solid second quarter results as we navigated declining steel prices and modest demand following an exceptional 2018.  The removal of North American section 232 and retaliatory tariffs in May 2019 have lowered North American prices.  Steel prices appear to be nearing the bottom early in the third quarter of 2019.  Overall demand, while lower than 2018, remained steady in all three segments.  World trade uncertainty tempered manufacturing growth particularly in the agricultural, heavy equipment, transportation and construction industries."

USD = CAD 1.32 (August 9)


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