Portland, Oregon-based Schnitzer Steel Industries, Inc. announced Thursday that for fiscal Q1 2011, the company reported record Q1 revenues of $675 million, compared to $394 million in fiscal Q1 2010.
"We generated significant momentum during the first quarter of our fiscal year due to the strong global demand for recycled metals," said Tamara Lundgren, President and Chief Executive Officer. "Each of our operating businesses delivered improved financial performance, and we continued to execute successfully on our strategic growth plan, announcing seven acquisitions since our fiscal year-end. These acquisitions provide us with a strong platform for our Metals Recycling Business in Western Canada and enhance our supply networks in the Northeast and the Southeast, and our Auto Parts Business in Texas, California and Oregon. We also commenced early stage operation of our new separation technologies at our recycling facilities in Oregon and Washington."
In the first quarter, Schnitzer's Metals Recycling Business shipped ferrous volumes of 1.2 million net tons (nt) and generated operating income of $26 million, a $10 million improvement over Q1 2010. Record Q1 ferrous sales volumes of 1.2 million nt reflected the continuing strong demand for recycled metal from the export markets. Ferrous sales volumes for the four quarters ending in November approximated the record processed sales volumes in fiscal 2008. Ferrous volumes during the quarter were 63 percent higher than in the first quarter of fiscal 2010. Export customers accounted for approximately 80 percent of total ferrous sales volume, including shipments to 11 countries. The top export destinations were China and South Korea.
Total revenues for Schnitzer's Auto Parts business totaled $67 million in Q1 2011, compared to $55 million in Q1 2010, and $64 million in Q4 2010. "Our Auto Parts Business delivered another strong quarter of increasing revenue and higher operating income margins as a result of our strong self-service retail brand network which maximizes operating profit throughout the value chain of parts sales, core extraction and scrap," said Lundgren. "Our purchase volumes remained strong, and we continued to increase our storefronts with new locations in Texas and California, and expanded operations in Oregon."
Schnitzer's Steel Manufacturing Business reported improved year-over-year performance, although weaker demand compared to Q4 resulted in a negative operating margin for Q1, and finished steel sales volumes of 98 thousand nt declined 2 percent and 16 percent from the first and fourth quarters of fiscal 2010, respectively.
The average net sales prices for finished steel products increased by $16/nt, or 3 percent, compared with Q4 of fiscal 2010 and $114/nt, or 22 percent, compared to Q1 of fiscal 2010. Lower sales volumes and capacity utilization led to a decline in operating margins compared to the fourth quarter of fiscal 2010.