Worthington Industries reported sharply lower profits for both its fiscal 2022 fourth quarter and its full fiscal year ended May 31, 2021.
The Columbus, Ohio-based manufacturer and service center said the drop resulted partly from inventory holding losses at its steel processing division.
All told, Worthington reported net earnings of $80.3 million in its fiscal Q4’2022, down 29% from $113.6 million in fiscal Q4’2021 despite net sales rising 55% to $1.52 billion in the same period.
For the entire fiscal year 2022, the company reported net income of $399.3 million, down 46.1% from $741.5 million in fiscal 2021 even as sales rose 65% to $5.24 billion in the same comparison.
“Steel Processing was negatively impacted by inventory holding losses in the fourth quarter, but our Building Products and Consumer Products segments both continued to perform exceptionally well,” Worthington president and CEO Andy Rose said in comments released with earnings data after the close of markets on Wednesday, June 22.
Worthington’s Steel Processing division recorded adjusted earnings before interest and taxes (EBIT) of $16.5 million in FY Q4’22, down $81.3 million from FY Q4’21. The main reason: an inventory holding loss of $42.3 million in FY Q4’22 compared to inventory holding gains of $50.5 million in FY Q4’21.
Worthington said it ended FY Q4’22 with $34.5 million in cash, down $605.8 million from a year earlier because of acquisitions and an increase in working capital resulting from higher steel prices.
Rose put a positive spin on the outlook for Worthington’s 2023 fiscal year: “While the business environment continues to be challenging and there is some level of economic uncertainty, our teams are performing at a high level, and we remain optimistic about demand in our key end markets.”
By Michael Cowden, Michael@SteelMarketUpdate.com
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