Russel Metals Earnings Double in 2017

Fourth-quarter 2017 revenues in Russel’s energy products segment increased 24 percent to $300 million due to stronger demand and higher selling prices. Operating profits in the quarter hit $28 million, up from $5 million in the same quarter last year.

Revenues in Russel’s steel distributors segment jumped by 32 percent in the fourth quarter to $104 million, vs. fourth-quarter 2016.  Operating profits in the fourth quarter were about the same as last year as stronger revenues were offset by lower gross margins.

“Our service center and steel distribution operations turned in another solid performance for the quarter as strong activity offset the usual seasonal demand decrease. Demand for our energy product operations continued at a healthy level. Improved selling prices and previously implemented operating efficiencies led to stellar results for all of our energy operations,” commented John G. Reid, president and COO.

So far in 2018, Russel has seen a modest demand increase in a rising steel price environment, he added. “We are continuing to evaluate growth opportunities and systematically increase our value-added equipment across North America.”

Management at Russel is keeping an eye on the Section 232 debate in the United States, since prices in Canada tend to track with the U.S. The threat of U.S. trade action has already raised steel prices, and passage of some measure could potentially boost prices further. “Right now, it’s something we will have to react to, but we have no idea what the outcome is going to be,” Reid said.

Russel Metals is Canada’s second largest metals distributor behind Samuel, Son & Co., and is ranked among the Top 10 North American service centers.