Service Centers

Russel Metals' earnings slide 33% in Q1

Written by Ethan Bernard & Laura Miller

First quarter ended March 3120242023% Change
Net sales$1,061.1 $ 1,186.7-10.6%
Net income (loss)$49.7$73.9-32.7%
Per diluted share$0.82$1.19-31.1%
(in millions of Canadian dollars except per share)

Russel Metals’ earnings fell in the first quarter, but the Toronto-based metals distributor sees steel prices stabilizing in the near term and staying above historical averages.

The company logged Q1’24 net income of CA$49.7 million (US$36.3 million), down 33% from CA$73.9 million a year earlier, on sales that slipped 11% to CA$1.06 billion (US$770 million).

Russel noted that steel prices declined during the mid-to-latter part of the quarter before stabilizing in late March and into April.

“Our metals service centers experienced 2% higher average selling prices for the first quarter of 2024 as compared to the fourth quarter of 2023, as we benefited from the higher price levels at the outset of the first quarter and our continued growth in value-added processing,” Russel said in a statement on Wednesday.

“In addition, we shipped 4% higher volumes in the first quarter of 2024 as compared to the fourth quarter of 2023, due to the seasonal pick-up in demand,” the company added.

However, Russel noted that “steel distributors were negatively impacted in the quarter by overseas shipping issues, which delayed inbound product from the first quarter into the second quarter of 2024.”

Russel’s president and CEO, John G. Reid, explained on an earnings call on Thursday that the shipping delays were due to geopolitical events in the Middle East and the associated delays on the Suez Canal.

The rerouting of ships caused delays of three to four weeks, but “I think we’ve normalized as we’ve rerouted … and now that we’re back on track,” he said.

He doesn’t think there will be an impact in Q2 but noted that “the part of the business that brings in product from export markets … might have to renavigate its routes coming into North America.”


The company said it invested CA$24 million in cap-ex in Q1’24.

This includes: (1) CA$2 million for its greenfield facility in Saskatoon (Saskatchewan) scheduled to open in summer 2024; (2) CA$3 million for the expansion of its Texarkana (Texas) facility scheduled for completion in fall 2024; and (3) CA$3 million for a flat and a tube laser in its Winnipeg (Manitoba) facility, both of which will be operational in Q2’24.

Samuel update

As previously reported, Russel provided an update on April 15 of its acquisition of seven service centers in western Canada and the northeastern US from Samuel, Son & Co. The companies announced the CA$225 million deal in December.

Canada’s Competition Bureau’s review of the transaction is ongoing, Russel said.

“The Competition Bureau has advised us and Samuel that it has concerns related to a narrow segment of product in a specific geography. We and Samuel continue to engage constructively with the Competition Bureau in an effort to bring this matter to a resolution,” Russel said.

The company noted that the acquisition is no longer expected to close in Q2’24. However, Russel added that “we continue to advance our integration planning initiatives in coordination with Samuel.”


For its near-term  outlook, Russel said “we expect steel prices to stabilize and remain at price levels that are above historical averages, as a result of solid end-market demand and expected discipline by North American steel mills.”

Regarding Nucor’s recent implementation of a consumer spot price (CSP) for steel sheet, Reid said on the call, “It is something I’ve never seen done in my 30-plus years in the business, effectively in flat roll.”

Still, trendsetter Nucor has been “very successful” in its long-time practice of regularly publishing prices for its long products, including bars and beams, Reid noted. “It has proven very effective in other products. We’ll see in flat roll how effective it becomes and if it holds water,” he commented.

He believes Nucor’s CSP adds “some credibility and validity” to published indexes and “will help stabilize some of the ambiguity around pricing.”

As for steel demand, “Over the medium-term, we expect growth in North American steel consumption as a result of onshoring activities and infrastructure spending initiatives in both Canada and the US,” the company said.

Also in the medium-term, Russel said “we are positioned to gain market share through our ongoing investment initiatives.”

Ethan Bernard

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Laura Miller

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