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Russel Metals announces 2018 results

Steel News - Published on Tue, 12 Feb 2019

Image Source: SteelGuru
Russel Metals Inc announced continued solid financial results for the 2018 fourth quarter and for the year ended December 31, 2018. For the year ended December 31, 2018, we reported stellar results in all three of our operating segments. Net income of USD 219 million or USD 3.53 per share on revenues of USD 4.2 billion was almost USD 100 million higher than the comparable 2017 net income of USD 124 million or USD 2.00 per share on revenue of USD 3.3 billion. Net income for the 2018 fourth quarter was USD 46 million or USD 0.74 per share on revenues of USD 1.1 billion. These results compare to the net income of USD 28 million or USD 0.45 per share in the 2017 fourth quarter.

Revenues in our metals service centers increased 25% to USD 524 million for the quarter compared to the same period in 2017 due to increased price per ton. Steel price increases and continued growth in value-added processing resulted in a 28% improvement in the average selling price over the fourth quarter of 2017. Gross margins were 20.9% compared to 19.3% in the fourth quarter of 2017. Operating profits of USD 28 million were 80% higher than the USD 16 million reported in the same quarter in 2017.

Revenues in our energy products segment increased 44% to USD 432 million compared to USD 300 million in the 2017 fourth quarter. Revenues increased primarily due to U.S. line pipe projects and higher oil field service store activity. Gross margin as a percentage of revenues was 17.8% consistent with the 2018 third quarter and compared to 21.3% in the same quarter last year due to lower margins on the large U.S. line pipe projects. This segment had operating profits of USD 33 million compared to USD 28 million in the same quarter last year.

Revenues in our steel distributors segment increased by 50% to USD 157 million compared to USD 104 million in the 2017 fourth quarter due to higher steel prices and stronger demand. Gross margins as a percentage of revenues were 13.3% compared to 14.9% due to product mix. Operating profits were USD 11 million compared to USD 8 million in the 2017 fourth quarter.

Mr John G. Reid, President and CEO commented that "We are extremely pleased with the excellent results in 2018 and would like to commend all our operations for their tremendous execution during the fourth quarter and throughout the year. Our strong earnings were a result of their ability to utilize local market knowledge to react quickly to the changing environment. In addition, growth in both our value-added processing and our US energy field stores and our distributor's ability to source product through international trade expertise greatly contributed to our outstanding year."

Mr Reid continued that "Although steel prices are still at healthy levels to date in 2019, they are experiencing some downward pricing pressure. Specifically, flat rolled prices are lower as scrap prices have fallen and import spreads offer attractive opportunities as quotas reset. Plate continues to be the strongest North American product due to strong demand levels. The energy market is seeing a modest pull-back in capital spending due to reduced oil prices. For the first quarter, we expect stable demand with pressure on steel prices."

The Board of Directors approved a quarterly dividend of USD 0.38 per common share payable March 15, 2019 to shareholders of record as of February 27, 2019.

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Posted By : Rabi Wangkhem on Tue, 12 Feb 2019
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