Russel's Sequential Earnings Up, Sees Ongoing Favorable Demand

The company reported Q1 net income of Canadian $73.9 million (US$55.2 million) on sales of nearly CA$1.2 billion compared to net income of CA$98.7 million on sales of CA$1.34 billion in the year-ago quarter.

Sequentially, Russel reported a 16% improvement in tons shipped from its metals service centers segment. Its steel distributor segment saw lower sales but much higher margins “due to the favorable market conditions.”

“The steel price increases that were experienced in late 2022 continued throughout the 2023 first quarter as a result of modest inventory in the supply chain and an improvement in industrial-based demand from our customers in a range of sectors including manufacturing, fabrication, agriculture, ship building, non-residential construction, energy and alternative energy,” Russel said in its Q1 earnings report.

The company says the favorable demand trends and steel price increases it saw late in Q1 are being maintained into Q2, providing short-term benefits to its metals service centers and steel distributor segments.

Russel’s service centers stock a wide range of products including hot-rolled and cold-finished steel, pipe and tube products, stainless steel, aluminum, and other nonferrous specialty metals. The steel distributor operations are master distributors selling large volumes of steel to other service centers and large OEMs on an as-is basis. A third segment, energy field stores, supplies a specialized product to customers in the energy industry.

In Q1, Russel spent CA$14 million in capital expenditures to modernize facilities and add value-added processing equipment. An expansion was recently approved for its facility in Little Rock, Ark., and a modernization project in Saskatoon, Sask., was brought forward. Several value-added processing projects advanced in the US and Canada during Q1 are expected to come online over the next few quarters.

By Laura Miller, laura@steelmarketupdate.com