Steel Dynamics Reports Numbers for Quarter

Steel Dynamics, Inc. announced third quarter earnings of $9.2 million, compared to earnings of $5.4 million in the second quarter of the year. Net income for the same quarter last year was $29.1 million. Net sales for the third quarter increased 16 percent to $254 million, compared to $219 million in the second quarter of the year. Sales increased six percent as compared to $241 million recorded in the third quarter of 2002.

SDI’s shipments and production volume grew due to the strength in the flat-roll steel markets and increased penetration of the structural steel market. Third quarter consolidated shipments were 745,000 tons, 14 percent higher than the second quarter of 2003, and 25 percent higher than the third quarter of 2002. Structural steel shipments increased sequentially each month, reaching a total of 130,000 tons for the third quarter. Third quarter production of 787,000 tons by SDI’s steel operations rose 23 percent compared to the third quarter of last year. In August the Flat Roll Division achieved a new monthly hot-band production record.

"We believe market conditions have begun to improve," said Keith Busse, president and CEO. "Our Flat Roll Division’s third quarter shipments improved from the second quarter and our order book for the fourth quarter is stronger. In addition, our construction-related businesses are also seeing stronger demand. While part of our recent volume growth is attributable to gains in market share, there appears to be a gradual pick-up in the level of building project activity in the markets we serve.

In the third quarter, SDI’s average consolidated selling price per ton was $341 per ton; $6 per ton higher than the second quarter and $62 per ton lower than the third quarter of 2002. Third quarter scrap costs increased approximately $3 per ton, compared to the second quarter of 2003, and increased approximately $11 per ton from the third quarter of 2002. This resulted in a slight increase in overall margins when compared to the second quarter’s results.

"Recent steel-scrap price increases are expected to result in a fourth quarter scrap-cost increase of approximately $12 per ton. We believe higher selling prices will more than offset the effect of higher scrap costs during the fourth quarter, thereby slightly increasing our margins," Busse said.