Help Desk -
9958816305, 9810335381

Russel Metals Announces Q2 Results

Steel News - Published on Wed, 14 Aug 2019

Image Source: RusselMetal
Russel Metals Inc announced financial results for the second quarter ended June 30, 2019. For the 2019 second quarter, we report net income of CAD 31 million on revenues of CAD 937 million compared to net income of CAD 66 million in the second quarter of 2018. Gross margins in the 2019 second quarter of 18.8% were lower than the 24.4% 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 our metals service centers decreased 5% to CAD 535 million for the quarter compared to the same period in 2018. Same store tons shipped in the second quarter of 2019 were approximately 7% lower than the second quarter of 2018. The average selling price improved 2% over second quarter 2018 aided by our continued growth in value-added processing. Gross margins were 18.7% compared to 25.5% in the second quarter of 2018 and 19.2% in the 2019 first quarter. Gross margin as a percentage of revenues in the second quarter of 2019 was lower than 2018 related to the higher cost of inventory and competitive pricing pressure due to destocking of higher priced inventory in the industry. Operating profits of CAD 23 million compared to CAD 57 million reported in the same quarter in 2018.

Revenues in our energy products segment decreased 7% to CAD 298 million compared to USD 320 million in the 2018 second quarter due in part to reduced year-over-year North American rig counts. Gross margins were 19.5% compared to 20.9% for the 2018 second quarter. This segment had operating profits of CAD 24 million compared to USD 28 million in the same quarter last year.

Revenues in our steel distributors segment increased by 8% to CAD 100 million compared to CAD 92 million in the 2018 second quarter. Our Canadian operation continued to experience higher demand from their customer base due to opportunities presented by the trade disruptions. Gross margins were 13.5% compared to 26.8% as margins returned to historical levels during a declining steel price environment. Operating profits were CAD 7 million compared to CAD 15 million in the 2018 second quarter. Our revenues for the six months ended June 30, 2019 were CAD 2.0 billion up 3% from CAD 1.9 billion for the same period in 2018 due to higher selling prices. Our 2019 year to date earnings of CD 65 million or CAD 1.05 per share compared to CAD 105 million or USD 1.69 per share for the same period in 2018.

Mr John G Reid, President and CEO commented that "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."

Mr Reid continued that "WTI oil prices continue to be range bound and rig counts are trending below last year’s level in both Canada and the US Areas which should provide positive momentum to our energy products segment include growth in the Permian Basin in the US and LNG projects in Western Canada."

Source :

Posted By : Ratan Singh on Wed, 14 Aug 2019
Related News from Steel segment