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Schnitzer Steel announce Q1 2015 financial results

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During the quarter, the market experienced the steepest decline in ferrous prices since 2012. From September through November 2014, ferrous export selling prices declined approximately USD 80 per tonne, or 20%, and ferrous domestic prices declined approximately USD 60 per tonne, or 15%.

For the quarter, we reported adjusted earnings per share of USD 0.08, excluding the adverse impact of reselling or modifying the terms of certain previously contracted bulk ferrous shipments and charges attributed to restructuring. This compares to the Q1 of fiscal 2014 adjusted loss per share of USD 0.18, excluding charges attributed to restructuring. The reported loss per share of USD 0.09 for the Q1 ended November 30th 2014 compares to a reported loss per share of USD 0.23 for the prior year quarter.

During the Q1 of fiscal 2015, all three business segments generated positive operating income, largely due to benefits from productivity initiatives. Our Metals Recycling and Auto Parts Businesses were both significantly impacted by the decline in ferrous selling prices, resulting in an adverse impact from average inventory accounting estimated to be approximately USD 9 million, or USD 0.23 per share, which offset the benefits of productivity improvements and cost savings. Metals Recycling’s adjusted operating income per ton of USD 8 excluded the impact of reselling or modifying the terms of certain previously contracted bulk ferrous shipments for delivery during the Q1 of approximately USD 6 per ton. Metals Recycling’s reported operating income per ton of USD 2 increased from USD 1 operating income per ton reported in the Q1 of fiscal 2014, notwithstanding an estimated adverse impact of approximately USD 7 per ton from average inventory accounting.

In Auto Parts, operating income of USD 2 million included an estimated adverse impact of average inventory accounting of approximately USD 2 million. Our Steel Manufacturing Business generated USD 6 million in operating income, continuing to benefit from strong demand in West Coast construction markets and contributions from productivity initiatives.

Ms Tamara Lundgren, President & CEO of Schnitzer Steel Industries said that “While global commodity markets remain challenging, the recovering US economy is driving higher domestic demand for steel. Our Steel Manufacturing Business more than tripled its Q1 operating income versus last year benefiting from higher selling prices, increased rolling mill utilization and contributions from productivity improvements. In our Metals Recycling Business, we delivered ahead of schedule on our productivity improvement and cost savings initiatives which contributed significantly toward year-over-year improved performance in that segment.”

Ms Lundgren said that “We are continuing to take steps to improve business efficiency and reduce our cost base across our organization. We have identified further targeted initiatives in our Auto Parts Business and now anticipate annual benefits of USD 14 million, which is up from the USD 7 million we previously announced, approximately half of which we expect to realize during the H2 of fiscal 2015. We believe these actions will continue to enhance our performance and should provide greater opportunity for margin expansion as market conditions improve.”

Source – Strategic Research Institute

Zhejiang Yaang Pipe Industry Co., Limited

Article Categories:
Metals · Steel

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