Schnitzer Steel Industries Inc. posted its best first half results in company history following a strong second quarter earnings. The result comes thanks to high prices and strong demand for both ferrous and nonferrous scrap.
The Portland, Ore.-based scrap recycler and long steel producer recorded net income of $38 million in the second quarter of fiscal 2022. Net earnings for the six months ended Feb. 28, 2022, were $85 million, besting the same year-ago period by more than 39%.
Revenue was $783 in the quarter, down 1.9% from $798 million in the prior quarter, according to earnings data released on Wednesday, April 6. First half sales were $1.6 billion, 30.5% better than the $1.1 billion in the prior period.
The company said it benefited from strong global demand for recycled metals, and a robust West Coast market for finished steel products. Ferrous and nonferrous sales volumes were up year-over-year by 10% and 8%, respectively. The positive results were achieved despite supply chain disruptions and compressed metal spreads, the company said.
Schnitzer’s sales volumes included the first full quarter contribution from the Columbus Recycling acquisition. Results also reflected average selling prices at or near multi-year highs for ferrous and nonferrous recycled metals – and at all-time highs for finished steel products.
“After delivering record first quarter results, our second quarter performance continued the trend of strong financial and operating performance leading to first half results that were the highest in our company’s 116-year history,” Schnitzer chairman, president and CEO Tamara Lundgren said. “Global demand for our products and services remains very high, our outlook is strong, and our team is committed to supporting all our stakeholders safely and responsibly as we navigate through these challenging times and advance our strategic priorities.”
Average ferrous and nonferrous net selling prices were up by 15% and 33% year-over-year, respectively. But finished steel sales volumes were down 22% versus the prior year – reflecting supply chain disruptions and construction delays stemming from a concrete workers’ strike in the Pacific Northwest.
Average net selling prices for finished steel products were up 51% compared with the year-ago quarter, the highest prices on record, the company said.
“We continued to invest in the rollout of our new advanced metal recovery technology at our major recycling operations. … Shortly after the end of the quarter, we announced the launch of GRN Steel™, a line of net zero carbon products from our Cascade steel mill which reflects evolving customer demand trends and represents an important step towards achieving our sustainability goals,” Lundgren said.
Schnitzer is one of the largest manufacturers and exporters of recycled metal products in North America with operating facilities located in 25 states, Puerto Rico and Western Canada. Its steel manufacturing operations produce finished steel products, including rebar, wire rod and other specialty products. Schnitzer has seven deep water export facilities located on both the East and West Coasts as well as in Hawaii and Puerto Rico.
By David Schollaert, David@SteelMarketUpdate.com
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