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Steel Dynamics reports first quarter 2019 results

Steel News - Published on Tue, 23 Apr 2019

Image Source: SteelGuru
Steel Dynamics Inc has announced first quarter 2019 financial results. The company reported first quarter 2019 net sales of USD 2.8 billion and net income of USD 204 million. Comparatively, prior year first quarter net income was USD 228 million, with net sales of USD 2.6 billion. Sequential fourth quarter 2018 net income was USD 270 million, which included additional company-wide performance-based compensation of USD 0.04 per diluted share and lower earnings of USD 0.10 per diluted share, associated with planned maintenance outages at the company's liquid pig iron production facility and its two flat roll steel mills. Excluding these items, the company's fourth quarter adjusted net income was USD 302 million, or USD 1.31 per diluted share.

Mr Mark D Millett, President and Chief Executive Officer, said "The team delivered a strong first quarter performance in a somewhat challenging flat roll steel pricing environment. A downward trend in flat roll steel prices began in the second half of 2018, and continued through mid-first quarter 2019, reaching an inflection point in February 2019. The teams were able to increase shipments and offset some of the margin compression, resulting in first quarter 2019 consolidated operating income of USD 292 million and adjusted EBITDA of USD 382 million. The continued stabilization and improvement in flat roll steel prices are having a positive impact, resulting in increased flat roll order activity and solid order backlogs. We are seeing continued strength in the automotive, energy and industrial sectors, and as evidenced by strong steel fabrication backlogs, strength in non-residential construction."

First quarter 2019 operating income for the company's steel operations was USD 312 million, or 22% lower than sequential fourth quarter 2018 results. The decline in earnings resulted from metal spread compression driven by lower flat roll steel pricing, which more than offset increased overall steel shipments. The first quarter 2019 average product selling price for the company's steel operations decreased USD 38 to USD 902 per ton. The average ferrous scrap cost per ton melted only decreased USD 5 to USD 338 per ton.

First quarter 2019 operating income from the company's metals recycling operations increased to USD 20 million, compared to USD 17 million in the sequential fourth quarter, based on improved recycled nonferrous shipments and average pricing. Conversely, recycled ferrous shipments and metal spread declined modestly in the quarter.

First quarter 2019 operating income from the company's steel fabrication operations was a strong USD 21 million, or 39% higher than sequential fourth quarter results. Earnings improved as higher product pricing and lower raw material steel input costs, resulted in expanded profit margins which more than offset lower shipments related to inclement weather conditions that occurred during the first quarter. The steel fabrication platform order backlog remains strong, and customers remain optimistic concerning non-residential construction projects heading into the summer season.

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Posted By : Sanju Moirangthem on Tue, 23 Apr 2019
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