Olympic Steel Q2 earnings slide on 'challenging' conditions

Olympic Steel’s earnings tumbled in the second quarter, and the company expects near-term business conditions to remain “challenging.”

The Cleveland-based service center group reported net income of $7.7 million in Q2’24, down 49% from $15 million a year earlier on sales that fell nearly 8% to $526.3 million.

The company sold 229,090 short tons (st) of carbon flat products in the quarter, up slightly from 226,275 st in Q2’23.

“Olympic Steel’s ability to capitalize on our diversification strategy was critical to delivering profitability across all three business segments in the second quarter,” Richard T. Marabito, Olympic’s CEO, said in a statement on Aug. 1.

The company has carbon flat, specialty metals flat, and pipe and tube products segments.

Marabito noted that hot-rolled (HR) coil prices fell 22% during the second quarter and that HR prices were down 39% since the beginning of the year.

“Our efforts to grow and expand in end products, higher-margin flat-rolled products – including coated products – and additional fabrication capabilities have strengthened our business and make us more resilient in challenging pricing environments,” Marabito said.

He noted the company recently ordered two new cut-to-length lines and one high-speed slitter “to further expand our efforts in our coated and specialty metals product lines.”

Outlook

Looking ahead, Marabito remarked that Olympic is “in an excellent financial position, with a strong balance sheet and more than $340 million of borrowing availability.”

“This access to capital gives us flexibility to grow organically and through acquisition,” he said.

“While we expect market conditions to remain challenging in the near term, we are confident that Olympic Steel is well-positioned to navigate these pressures to deliver consistent results for our shareholders,” Marabito concluded.