Top-News
Mittwoch,
19.10.2016 18:00
von
PR Newswire
| Aufrufe: 126
Steel Dynamics Reports Third Quarter 2016 Results
Mann mit Smartphone und Tablet (Symbolbild).
© metamorworks / iStock / Getty Images Plus / Getty Images
PR Newswire
FORT WAYNE, Ind., Oct. 19, 2016
FORT WAYNE, Ind., Oct. 19, 2016 /PRNewswire/ -- Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced third quarter 2016 financial results. Excluding a litigation settlement charge of approximately $5 million (pretax), third quarter 2016 adjusted net income was $160 million, or $0.65 per diluted share, on net sales of $2.1 billion. Including this charge, the company reported GAAP net income of $157 million, or $0.64 per diluted share.
The third quarter 2016 also included non-cash purchase accounting charges associated with the company's recent Vulcan acquisition of approximately $2 million (pretax). Comparatively, prior year third quarter net income was $61 million, or $0.25 per diluted share, on net sales of $2.0 billion, and sequential second quarter 2016 net income was $142 million, or $0.58 per diluted share, on net sales of $2.0 billion.
"During the third quarter 2016, positive momentum in flat roll metal spread expansion resulted in improved sequential consolidated operating earnings, which increased 11 percent to $284 million," said Mark D. Millett, President and Chief Executive Officer. "Year-over-year flat roll steel import levels declined approximately 20 percent, while customer inventory levels remained low compared to historical averages. The domestic steel demand outlook is relatively unchanged, with the heavy equipment, agricultural and energy markets remaining weak, while automotive continues to be strong and construction continues to improve. However, late in the third quarter, customers were hesitant to make purchases ahead of an anticipated scrap price decrease and as a result September steel shipments were lower than anticipated.
"Our metals recycling platform earnings decreased in third quarter 2016, as scrap prices declined in both August and September," continued Millett. "Ferrous scrap demand declined based on lower domestic steel mill utilization, resulting in lower ferrous shipments, while ferrous metal margin remained steady. Earnings from our fabrication operations also declined in the quarter, due to increased steel input costs more than offsetting higher selling values. However, our fabrication platform continues to experience steady demand from the non-residential construction sector. Based on continued strong generation of cash flow from operations of $196 million in the third quarter 2016, we maintained record liquidity of over $2.2 billion at the end of September 2016, providing a firm foundation for growth."
Additional Third Quarter 2016 Comments
Third quarter 2016 operating income for the company's steel operations increased 13 percent to $311 million sequentially, based on meaningful metal spread improvement which more than offset a nine percent reduction in shipments across the platform. The company's average steel product price increased more than consumed raw material scrap costs, resulting in steel metal spread expansion. The third quarter 2016 average product selling price for the company's steel operations increased $100 to $740 per ton. The average ferrous scrap cost per ton melted increased $24 to $251 per ton.
Third quarter 2016 operating income attributable to the company's sheet products increased 29 percent when compared to the sequential second quarter, driven by metal spread expansion, which more than offset the nine percent decline in flat roll shipments. The successful addition of Galvalume® coating capabilities to the company's Columbus Flat Roll Division product offerings, resulted in about 25,000 tons of lost July shipments due to the required down time on one of the galvanizing lines for equipment installation. Operating income from long products decreased 34 percent, as lower shipments more than offset metal spread improvement related to increased average product pricing outpacing higher scrap costs in the quarter. Aside from the construction sector, long product steel demand is generally challenged, and selling values are under pressure from excess domestic production capability. The company's steel production utilization rate was 85 percent in the third quarter 2016, compared to 95 percent in the sequential quarter and compared to the domestic industry utilization rate of approximately 70 percent.
Third quarter 2016 operating income from the company's metals recycling operations was $10 million, compared to $15 million in the sequential quarter. Ferrous shipments decreased in the quarter, as domestic steel mill utilization rates declined and metal spread remained steady.
The company's fabrication operations recorded third quarter 2016 operating income of $18 million, compared to $24 million in the sequential second quarter. Shipments were steady in the quarter; however, metal spread compression occurred as product pricing appreciation was more than offset by higher cost steel utilized in the third quarter 2016.
The company also recorded a litigation charge in the third quarter 2016 related to the settlement of the Standard Iron Works v. Arcelor Mittal et al. direct purchaser class action lawsuit in the amount of approximately $5 million. The settlement requires preliminary and final approval by the Court, which the company anticipates it will receive.
Year-to-Date September 30, 2016 Comparison
For the nine months ended September 30, 2016, net income was $362 million, or $1.48 per diluted share, on net sales of $5.9 billion, as compared to net income of $123 million, or $0.51 per diluted share, on net sales of $6.0 billion for the nine months ended September 30, 2015. Year-to-date 2016 shipments meaningfully improved for the company's steel and fabrication operating platforms. However, same period consolidated net sales decreased two percent, as a result of decreased steel and metals recycling selling values. Year-to-date 2016 consolidated operating income increased $364 million, or 118 percent, based primarily on improved earnings from the company's steel operations. The average year-to-date selling price for the company's steel operations decreased $43 to $651 per ton. The average year-to-date ferrous scrap cost per ton melted decreased $51 to $220 per ton.
The company generated strong cash flow from operations of $643 million during the nine months ended September 30, 2016, with relatively flat working capital requirements. Including its undrawn revolver and available cash of $1.1 billion, the company maintained record liquidity of over $2.2 billion at September 30, 2016.
Outlook
"Steel customer inventory levels remain lower than historical levels and year-over-year steel imports have declined approximately 20 percent," said Millett. "However, there has been buyer hesitancy in anticipation of possible declines in scrap pricing, with an expectation that this might further pressure steel prices. Additionally, we are heading into a seasonally lower demand environment and customers are hesitant to significantly increase inventories before the end of the year. Due to these factors, we anticipate lower sequential volumes in our operating platforms, which is seasonally typical for the calendar fourth quarter and sequentially weaker realized steel pricing. Although domestic automotive production may be coming off record levels, we believe 2017 automotive steel consumption will be steady with Mexico growing production, and that there will be additional growth in the construction sector, especially for larger, public sector infrastructure projects. We could also see some improved activity within the energy sector next year.
"We continue to see progress at our Columbus Flat Roll Division. The successful market and product diversification that we achieved at Columbus during 2015 is one of our key differentiators for anticipated improved annual profitability in 2016. Columbus achieved near record nine month production levels for 2016, while continuing to improve and diversify its value-added production capability. The team successfully added the capability to produce value-added Galvalume® flat roll products during the third quarter 2016, and the $100 million paint line addition is on schedule to begin production in the first quarter 2017, adding 250,000 tons of value-added painting capability.
"We continue to strengthen our financial position through strong cash flow generation and the execution of our long-term strategy. We are pleased that due to our strong balance sheet and continued free cash flow generation, we are able to add the optionality of a share repurchase program to our capital allocation strategy. We are well-positioned for growth, and remain focused on delivering shareholder value through organic and strategic growth opportunities."
| Supplemental Information | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | |
| | | | Third Quarter | | | Year to Date | | | | | | | ||||||
| | | | 2016 | | | 2015 | | | 2016 | | | 2015 | | | 1Q 2016 | | | 2Q 2016 |
| External Net Sales | | | (Dollars in thousands) | |||||||||||||||
| Steel | | $ | 1,557,502 | | $ | 1,351,387 | | $ | 4,241,382 | | $ | 4,112,483 | | $ | 1,217,176 | | $ | 1,466,704 |
| Fabrication | | | 177,429 | | | 174,954 | | | 528,026 | | | 490,490 | | | 180,055 | | | 170,542 |
| Metals Recycling | | | 306,092 | | | 345,572 | | | 886,559 | | | 1,162,378 | | | 269,407 | | | 311,060 |
| Other | | | 60,287 | | | 79,010 | | | 210,546 | | | 238,014 | | | 74,663 | | | 75,596 |
| Consolidated | | $ | 2,101,310 | | $ | 1,950,923 | | $ | 5,866,513 | | $ | 6,003,365 | | $ | 1,741,301 | | $ | 2,023,902 |
| | | | | | | | | | | | | | | | | | | |
| Operating Income | | | | | | | | | | | | | | | | | | |
| Steel | | $ | 311,127 | | $ | 126,735 | | $ | 723,348 | | $ | 344,943 | | $ | 135,692 | | $ | 276,529 |
| Fabrication | | | 17,814 | | | 36,733 | | | 73,401 | | | 85,754 | | | 32,075 | | | 23,512 |
| Metals Recycling Werbung Mehr Nachrichten zur Steel Dynamics Aktie kostenlos abonnieren
E-Mail-Adresse
Bitte überprüfe deine die E-Mail-Adresse.
Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1  Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News | ||||||||||||||||||
