Steel Mills
Olympic Steel Sees Margin Improvement in Q2 and H1
Written by Sandy Williams
August 6, 2015
Olympic Steel net sales fell to $316.3 million in second quarter and dropped 9.8 percent to $661.1 million for the first half of 2015. Declines in both periods were attributed to lower shipments and lower average selling prices due in part to the impact of subsidized imports on the market.
The company reported a net loss of $21.2 million and took a goodwill impairment charge of $24.5 million on its tubular and pipe segment. The write down was an accounting requirement related to future cash flow and declines in the market and “not because the business has gone backwards,” said chief financial officer Rick Marabito. The segment remains profitable and in the upper quarter of the market for performance.
Olympic has been focused on reducing inventory, paying down debt and lowing operating costs. Year to date inventory is down 22 percent or $68 million. President and chief operating officer David Wolfort said Olympic met its objectives and the inventory is now balanced. Inventory turnover improved to 4.4 times for Q2 and in June reached 4.7 times.
Gross margins have improved to more historical levels. At the end of Q2 consolidated gross margin decreased to 18.8 percent of sales from 19.3 percent a year ago. Marabito noted that Olympic Steel’s pricing contracts reset each quarter and that third quarter margin decline was not as steep as second quarter.
Olympic Steel praised the recent coated and cold rolled trade suits that have been filed. “We are free market advocates at Olympic Steel and applaud these actions,” said Wolfort. “If free market forces determine winners and losers, we are confident North America can survive. We are not advocating unfair protectionist policies, just a level playing field for everyone.”
Chairman and chief executive officer Michael Siegal said that the cases still need to be acted upon by the Commerce and USITC. “All of this will take time and actual duties will not be in effect till next year. Therefore, we do not expect immediate impact on prices, however, the tide of illegal imports may slow and subsequent petitions are also likely to be filed on hot rolled and stainless steels. Until an outcome is determined, said Siegal, he doesn’t think customers are paying attention to it.
Olympic executives said they are not worried about possible labor strikes at US Steel or ArcelorMittal and think the automotive labor negotiations will have “more teeth.”
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
Atlas completes Evraz NA deal, renames firm, and hires former USS exec as CEO
Atlas Holdings has completed its acquisition of Evraz North America (Evraz NA) and its subsidiaries.
ArcelorMittal: As tariffs slow global growth, Calvert could be a bright spot
ArcelorMittal expects less demand growth across most of the markets it operates in, including the US, because of President Donald Trump’s tariffs. But the Luxembourg-based steelmaker also thinks it stands to benefit from an increasingly regionalized world thanks to investments like the new EAF at its mill in Calvert, Ala.
Ternium posts solid Q2, expects further shipment growth
Latin American steel producer Ternium delivered a solid performance in the second quarter of 2025. Performance was driven primarily by higher realized steel prices in Mexico, even as shipment volumes declined slightly across its regional portfolio.
Algoma swings to loss on ‘unprecedented disruptions’ and trade barriers
Canada’s Algoma Steel saw a sharp loss in the second quarter amid a continued challenging market environment and “tariff uncertainties.”
Nucor eyes long-term gains amid strong demand and trade enforcement
Resilient demand across its steel product lines, combined with the continued ramp-up of key expansion projects, drove Nucor’s improved financial results and record-setting performance in the second quarter. That’s according to company executives speaking on an earnings conference call on Tuesday.