Steel Dynamics, Inc. announced record annual net sales of $987 million and record shipments of 2.8 million tons, resulting in net income of $47 million, which represents the company's third strongest yearly earnings performance.
Fourth quarter 2003 net sales of $279 million increased 10 percent as compared to the third quarter, with net income of $17 million.
Fourth quarter consolidated operating profit was $34 per ton, and for the year was $37 per ton. The Flat Roll Division achieved record annual production volume, while the Structural and Rail Division increased its annual shipments to 462,000 tons during 2003.
"Steel Dynamics has experienced another year of opportunity and growth. We are very pleased with the operating performances at our Flat Roll and Structural Divisions as well as the start-up progress of our Bar Products Division," said Keith Busse, president and CEO of Steel Dynamics. "At the same time, we experienced, as did others in our industry, an unprecedented increase in steel scrap costs, up approximately $22 per ton in 2003 compared to 2002, and up $18 per ton in the fourth quarter compared to the third quarter. The higher scrap costs, combined with decreased selling values of $12 per ton, resulted in decreased margins of approximately 10 percent for the year, although selling values increased $21 per ton from the third to fourth quarter. Market weakness early in the year coupled with unprecedented resource-cost escalation in the latter half of the year made 2003 a volatile year.
"During 2004, we expect to see continued improvement in the U.S. economy with stronger demand for steel in the non-residential construction and capital goods markets. Throughout the year, we are optimistic that we will begin to see favorable quarter-to-quarter margin and earnings growth. We are currently experiencing strong bookings with rapidly rising steel prices in the first quarter of 2004 which should more than offset or mitigate the financial impact of the further escalation in scrap prices. With the expectation that all three of our Indiana mini-mills and Iron Dynamics will be in operation this year, Steel Dynamics is in a position to ship an increasing volume and breadth of value-added steel products in 2004, enhancing prospects for a much stronger year," Busse said.