Portland, Oregon-based Schnitzer Steel Industries Inc. says it expects net income in the range of $43 million to $45 million in its fiscal 2021 fourth quarter, which ended August 31, 2021. That figure is below the more than $60 million in net income earned in the previous quarter, but the company says favorable market conditions continue to generate profits.
“Market conditions for recycled metals were strong, with the company’s average ferrous selling prices reaching their highest level since 2008 and nonferrous market selling prices trading at or near multi-year highs,” the firm says of conditions this summer.
The company, which also operates an electric arc furnace (EAF) steel mill in Portland, adds, “Market selling prices for finished steel products also continued to increase on strong demand and reached their highest levels in more than a decade.”
A fire at the Portland EAF mill in May provided one reason for the net income total dropping from the previous quarter and helped create one unfavorable comparison with the year-ago quarter. “Finished steel sales volumes for the quarter are expected to be down 53 percent year over year. The mill began ramping up production in mid-August after substantial completion of the replacement and repair of damaged property and equipment was completed ahead of schedule.”
On the scrap side, ferrous and nonferrous sales volumes in the fourth quarter are expected to have increased year over year by 9 percent and 3 percent respectively, the company says. “Ferrous sales volumes were adversely impacted by the delayed arrival of one ship and nonferrous sales volumes were constrained by tight container availability.”
Despite the reduced income from the prior quarter, Schnitzer calls its just-concluded three-month period the “best fiscal fourth-quarter operating performance since fiscal 2011.” Adds the firm, “Adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] for the fourth quarter is expected to be in the range of $78 million to $81 million.”