Steel Mills

CMC Reports Record Quarterly and Full-Year Fiscal Results

Written by David Schollaert

Commercial Metals Company (CMC) posted record-breaking earnings from continuing operations of $152.3 million on net sales of $2.0 billion in the fourth quarter of FY 2021, exceeding the previous record posted the prior quarter by more than $22 million. For the full year, CMC’s earnings from continuing operations totaled $412.9 million, the best results in company history.

Commercial Metals Co“Looking at the quarter, I am extremely proud of the CMC team’s execution on multiple fronts,” said Barbara Smith, CMC’s chairman, president and CEO. “Commercially and operationally, we responded to robust market demand with record shipment and production levels at several of our steel mills. This heightened activity did not detract from our ability to continue building for the future.”

CMC’s North American adjusted EBITDA totaled $212.0 million for the fourth quarter of FY 2021 – its best results to date – driven by increased margins across multiple products lines, coupled with higher shipments of steel products and raw materials. That’s up 22% compared to $174.2 million in the same period last year.

Finished steel shipments grew by 2% year on year. Mill demand for rebar remained relatively steady, but shipments declined modestly from the prior year due to a shift in mix toward merchant bar and wire rod. Shipments of merchant and other products increased 29% versus the prior year, driven by the broad reopening of the U.S. economy, the company said.

CMC reached an agreement to sell its site in Rancho Cucamonga, Calif., with expected gross profits of approximately $300 million. Smith said that proceeds of the sale will be directly reinvested into CMC’s second micro mill in Mesa, Ariz.

CMC saw favorable market conditions across all key products, leading to mill volume growth of 5% and an increase of $300 per ton in average selling price compared to the year-ago quarter.

The steelmaker’s European segment’s net earnings surged 195% to $67.7 million for the fourth quarter of fiscal year 2021, compared to net earnings of $22.9 million for the prior-year quarter. The expansion was led by strong scrap margins and volume growth, driven by strong demand in the construction and industrial end markets.

Steady construction demand drove a 16% increase in rebar shipments compared to a year ago. Manufacturing recovery in Poland and Central Europe drove 24% growth in merchant and other steel products shipments, supported by the successful commissioning and production rampup at CMC’s new rolling mill in Poland. Average selling price increased by $317 per ton year on year, and $99 per ton sequentially.

Smith noted that CMC’s strong operating performance and financial results should continue in fiscal year 2022 due to an expanding marketplace, adding that sales volumes should remain solid, buoyed by a “replenished construction backlog in North America, as well as broad strength across key end markets in both North America and Europe.”

Although the company expects finished steel volumes to follow typical seasonal patterns, decelerating from the growth seen during the second half of 2021, Smith said that CMC expects first-quarter margins to remain consistent with the historical high levels seen in Q4.

CMC and its subsidiaries manufacture, recycle and fabricate steel and metal products through a network including seven electric arc furnace (EAF) minimills, two EAF micro mills, a rerolling mill, steel fabrication and processing plants, construction-related product warehouses, and metal recycling facilities in the U.S. and Poland.

By David Schollaert,

David Schollaert

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