Vancouver, British Columbia-based Tree Island Steel announced today its financial results for the three-month period ended June 30, 2019.
Revenues amounted to $52.6 million compared to $68.1 million in the same period last year, mostly attributable to sales volumes to US customers impacted by Section 232 steel tariffs and reduced demand for construction products, the company said in a press release.
Despite the higher average selling prices in the quarter, the company said, the lower demand and production volumes resulted in a gross profit of $4.9 million for the quarter, compared to $8.5 million for the same period in 2018. The resulting gross profit margin for the quarter was 9.3 percent compared to 12.5 percent in the same period last year. As a result, EBITDA in the second quarter of 2019 amounted to $2.6 million compared to $5.4 million during the second quarter of 2018.
“Our Q2 financial results were in part impacted by Section 232 steel tariffs and overall weaker demand in our end markets. Although revenues for Q2 were slightly lower than Q1, our gross profit margin and EBITDA for the quarter were better than the prior quarter. The improved profitability reinforce the actions we have taken to maintain selling prices, improve efficiency and management of costs,” said Dale R. MacLean, Tree Island’s President and CEO. “While we execute our sales plan to regain lost market share from the elimination of steel tariffs, our focus in second half of 2019 is also to continue to optimize our operations as we move forward towards more normalized production levels.”
“As the residual effects of these import tariffs wind down, we turn our focus on long-term sustainable growth as a guiding principle as we return to more normalized margin and operating patterns,” said Amar S. Doman, Chairman of Tree Island Steel.