Schnitzer Steel Industries, Inc., one of the largest manufacturers and exporters of recycled ferrous metal products in North America, also reported positive financial results at the end of its third fiscal quarter, May 31.
The company reported earnings per share of $0.41 for the fiscal on the quarter, as compared to losses of $0.31 in the third quarter of 2015 and $1.48 in the second quarter of 2016.
“Successful execution of our multi-year strategy to reduce costs and improve productivity led to our auto and metals recycling business delivering its best quarterly performance since 2011,” said Tamara Lundgren, Schnitzer’s president and Chief Executive Officer.
The dramatic improvement over the second quarter came about as a result of a combination of improved market conditions and the achievement of the company’s savings and productivity initiatives. Last year, Schnitzer announced a reorganization of two of its divisions and the idling of some of its recycling capacity.
Schnitzer’s ferrous sales volumes in the third quarter increased 13% from the second quarter, “due to stronger seasonal demand and the impact of the higher price environment on supply flows of scrap metal,” said Lundgren. But volumes were down 17 percent from the prior third quarter due to weaker global demand. Export customers accounted for 61 percent of total ferrous sales volumes in this year’s third quarter. Ferrous and nonferrous products were exported to 14 countries with Turkey, India and South Korea the top export destinations for ferrous shipments.
The improvement in export and domestic demand led to market prices increasing significantly from February to mid-May, when they slid somewhat. Overall, average ferrous selling prices during the quarter increased $46 per ton, or 27% from second quarter levels. That represented a decline of nine percent, or $20 per ton, from the 2015 third quarter, primarily as a result of weaker export demand.
Schnitzer’s operating income in the third quarter increased substantially from the second quarter, and, in a departure from the other financial results, from the third quarter of 2015 as well. A combination of stronger market conditions, higher volumes, and cost savings drove that performance, according to Lundgren.
Finished steel sales volumes increased 21 percent over the second quarter but declined six percent from the third quarter of last year “primarily,” said Lundgren.