Service Centers
A.M. Castle Sells Share of Kreher Steel to Duferco
Written by Sandy Williams
August 9, 2016
A.M. Castle & Co., a specialty metals distributor, announced that it will sell its 50 percent joint venture ownership in Kreher Steel Business to partner Duferco. Duferco will become the 100 percent owner of Kreher in exchange for a purchase price of approximately $31.6 million. The transaction is expected to close August 22, 2016.
The sale will allow A.M. Castle to focus on its two key markets, industrial and aerospace, and allow Duferco to increase its exposure to the U.S. oil and gas market served by Kreher Steel.
A.M. Castle plans to use the proceeds of the sale to pay down long-term debt. A.M. Castle sold its Houston and Edmonton facilities in February 2016 as part of a strategy to reduce the company’s exposure to oil related market fluctuations. In March, the company sold its subsidiary Total Plastics, Inc.
The company posted net sales of $130.7 million in second quarter 2016, down 21.4 percent from Q2 2015 due to lower average prices and decreased volume sales resulting from the closure of Houston and Edmonton. Excluding Houston and Edmonton, tons sold per day rose 5 percent compared to first quarter and 1 percent versus a year ago.
The restructuring helped to narrow the loss from continuing operations in second quarter. Net loss was $21.3 million compared to losses of $47.1 million in Q2 2015 and $44.8 million in Q1 2016.
Said President and CEO Steve Scheinkman, “While we are pleased with the improvement in our financial performance in the quarter, we know we still have more work to do and we continue to aggressively pursue opportunities for further improvement. Although the third quarter is historically one of our slower periods due to normal seasonality in the summer months, we enter the second half of the year more confident that the positive financial trends we saw in the second quarter will position us well to expand our customer base and grow our business over the long term.”
Sandy Williams
Read more from Sandy WilliamsLatest in Service Centers
Olympic opens new Houston facility for Action Stainless unit
Olympic Steel has opened a new facility in Houston to support its Action Stainless business.
Worthington Steel sees demand improvement after earnings slump
Lower volumes and steel prices dampened Worthington Steel’s profits, but market momentum is building, the metals processor said in its most recent quarterly earnings report.
Galvanized buyers see strong demand, but uncertainty lingers
Demand is up, but tariffs raise concerns
Olympic taps Zito for new VP of development role
Cleveland-based Olympic Steel Inc. has promoted Scott M. Zito to the newly created role of vice president of business development. Zito has been with the company for more than 40 years.
Worthington Steel and Samuel to close Cleveland coil processing JV
Worthington Steel confirmed it is closing the Worthington Samuel Coil Processing (WSCP) facility in Cleveland. WSCP is a joint venture between Worthington Steel and Oakville, Ontario-based Samuel, Son & Co.