Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/3ab18625d4138de1488f4f5ff150c933.jpg)
Worthington: Inventory Holding Losses Pull Down Q1 Profits
Written by David Schollaert
September 29, 2022
Worthington Industries reported sharply lower profits in its fiscal 2023 first quarter results ended Aug. 31, 2022, despite a boost in sales.
The Columbus, Ohio-based manufacturer and service center said the drop resulted largely from inventory holding losses at its steel processing division, which negatively impacted results by an estimated $48.6 million.
All told, Worthington reported net earnings of $64.1 million in its fiscal Q1’23, down nearly 52% from $132.5 million in fiscal Q1’22 despite net sales rising 27% to $1.41 billion in the same period.
The increase in net sales year-on-year (YoY) was driven by contributions from the acquisition of Tempel Steel and higher average selling prices across all segments.
“Steel Processing was negatively impacted by inventory holding losses in the first quarter, but our Building Products and Consumer Products segments both continued to perform exceptionally well,” said Andy Rose, Worthington’s president and CEO in comments released with earnings data on Thursday, Sept. 29.
Worthington’s Steel Processing division recorded adjusted earnings before interest and taxes (EBIT) of $34.9 million in FY Q1’23, down $72.8 million from FY Q1’22. The main reason was an inventory holding loss of $48.6 million in FY Q1’23 compared to inventory holding gains of $47.1 million in FY Q4’22.
Consumer Products’ net sales totaled $188.7 million, up 28%, or $40.9 million, over the prior year quarter due to higher average selling prices and contributions from the acquisition of Level5 in Q1’23.
Building Products’ net sales totaled $150.3 million, up 31%, or $35.6 million, over the prior year quarter on higher average selling prices, the company said.
Sales in the company’s Sustainable Energy Solutions division totaled $30.8 million, up 21%, or $5.3 million, from the comparable prior year quarter due to higher volumes.
Rose put a positive spin on the outlook for Worthington’s 2023 fiscal year: “Most of our businesses are holding up well despite increased market volatility and a murky economic outlook. Our teams are ready to respond to market demands, up or down, as changes occur,” Rose said.
Worthington announced it is splitting the company into two separate business, creating a standalone Worthington Steel (see related story).
By David Schollaert, David@SteelMarketUpdate.com
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/02/SMU_DS_headshot.png-150x150.jpg)
David Schollaert
Read more from David SchollaertLatest in Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor lowers 2024 output estimate for Brandenburg plate mill
Nucor has lowered the 2024 production estimate for its Brandenburg, Ky., plate mill due to soft market conditions.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/SSAB.png)
SSAB adjusts output in weak Q3, readies for Q4 rebound
SSAB said lower plate prices in the US were the primary reason for reduced results in the second quarter. With a dismal Q3 outlook, the Swedish steelmaker is adjusting production across its facilities. That includes moving up its annual US mill outage in anticipation of a better Q4. SSAB Americas Revenues in the Americas segment […]
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Topalian puts focus on “unfair” trade, eyes USMCA partners
Nucor’s top executive expressed concerns over unfair trade practices, highlighting increased steel imports from Mexico and Canada.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Cliffs_logo2.2.png)
Cliffs sees close of Stelco buy, bottom to steel tags, and Mexico out of USMCA
Cleveland-Cliffs expects its acquisition of Canada’s Stelco to close later this year, which will help the the Cleveland-based steelmaker as a bottom to steel tags nears.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor posts lower Q2 earnings, predicts tough Q3 too
Nucor recording lower second quarter earnings on falling steel prices. And the Charlotte, N.C.-based predicted that profits would be lower still in the third quarter, primarily because of weaker results from its steel mills divisions.