Schnitzer reports improved profitability

Portland, Oregon-based Schnitzer Steel Industries Inc. has reported increased earnings per share and wider ferrous scrap profit margins in its fiscal quarter ending May 31, 2018, compared with the same period last year.

Results for the company’s fiscal third quarter include earnings per share from continuing operations of $1.31 and adjusted earnings per share of $1.26. The company says those results are more than double 2017’s third-quarter earnings per share from continuing operations of 60 cents and adjusted earnings per share of 56 cents.

Reported and adjusted earnings per share from continuing operations in the second quarter of fiscal 2018 (ending Feb. 28) were $1.42, but those results included “discrete tax benefits” of 52 cents per share.

The company says its Auto and Metals Recycling (AMR) division’s operating income in the quarter ending May 31, 2018, was $55 million, or $56 per ferrous ton, which it calls “significantly higher than the prior year third-quarter operating income of $30 million, or $36 per ferrous ton.”

Adjusted operating income was $54 per ferrous ton compared with adjusted operating income of $34 per ferrous ton in the prior year third quarter. The company says its AMR division’s improved operating performance year-over-year “was driven primarily by expanded metal spreads, higher ferrous sales volumes of 19 percent, higher average ferrous and nonferrous net selling prices of 31 percent and 14 percent, respectively, benefits from commercial initiatives to increase our supply volumes and sustained contributions from productivity improvements.”

The company’s Cascade Steel and Scrap (CSS) division delivered third quarter operating income of $11 million, representing a $10 million improvement compared to the prior year’s third quarter. The improved performance “was driven primarily by a 29 percent increase in finished steel average net selling prices, which significantly outpaced the increase in the cost of steelmaking raw materials,” according to the company.

“Our third-quarter financial results reflect continued strong financial and operating performance in both of our businesses,” states Tamara Lundgren, president and CEO of the company. “AMR’s sales volumes increased significantly versus last year, and its third-quarter operating income per ton achieved levels last reached in fiscal 2011, at a time when both volumes and scrap prices were much higher than today.”

Schnitzer Steel Industries Inc., established in 1906, describes itself as one of the largest manufacturers and exporters of recycled metal products in North America, with operating facilities in 23 states, Puerto Rico and Western Canada. The company also operates auto parts stores and has steel manufacturing operations producing rebar, wire rod and other products.