Portland, Oregon-based Schnitzer Steel Industries Inc. says it more than tripled its earnings per share in the financial quarter that ended Nov. 30, 2020, compared with the previous one that ran from June through August of last year.
The September to November 2020 time frame marked the first quarter of fiscal 2021 for Schnitzer, and the company says the 50 cents per diluted share it earned marked a sizable increase from the 14 cents per share earned in the final quarter of fiscal 2020.
“We were very pleased with our first-quarter results, which reflect our second highest first-quarter operating income in the last 10 years,” says Tamara Lundgren, chairman and CEO of the scrap processing and auto recycling firm. “This strong performance reflects the resiliency of our operations and the agility of our team in leveraging positive market conditions while delivering on our productivity and operational efficiency initiatives and continuing to execute on our longer-term strategic initiatives.”
Lundgren also points to “strategic investments in advanced metal recovery technologies [that] will further enhance our operational efficiencies, and we expect to complete construction of these projects by the end of this fiscal year.”
Regarding market conditions, Lundgren comments, “There are many trends that support strong and sustainable ferrous and nonferrous scrap demand. The recent sharp increases in prices have been driven by low inventory levels after many quarters of destocking, followed by significantly higher steel mill and smelter buy plans and production levels, the transition to lower carbon technologies and the prospect of China’s re-emergence as an importer in the global ferrous scrap market. In a world that is seeking de-carbonization, we expect recycled scrap metal to be an increasingly important metals carbon solution and for demand to accelerate.”
The company says markets for scrap metal strengthened during the recently completed quarter, “with domestic ferrous selling prices returning to pre-COVID levels and nonferrous and export ferrous selling prices reaching multiyear highs by the end of the quarter.”
In the ferrous market, Schnitzer writes that “higher average selling prices and a strong focus on productivity improvements led to an expansion in metal spreads and operating margins, reflected in net income per ferrous ton of $14 and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) per ferrous ton of $38 in the quarter, both of which reflect a strong sequential increase from $4 and $27 [in the previous quarter], respectively.”