Schnitzer Steel’s Auto and Metals Recycling Segment Tips Record Q1 Profit

SEATTLE (Scrap Monster): Portland, Oregon-headquartered Schnitzer Steel Industries, Inc. has announced strong operating results for the period of first quarter ended November 30, 2017 of fiscal 2018. The company’s Auto and Metals Recycling (AMR) division posted the strongest first quarterly results since fiscal 2011.

The company’s earnings per share from continuing operations stood at $0.64, whereas the adjusted earnings from share during the quarter were $0.63. Both the earnings were adversely affected by $0.14 per share on account of a legal environmental liability amounting to $4 million. During the prior quarter, the company had reported earnings per share and adjusted earnings per share of $0.65 and $0.63 respectively.

The AMR division posted its best Q1 performance in the past seven years. The operating income from the division almost doubled from the previous year to $35 million. The operating income from ferrous ton stood at $44, mainly aided by robust growth in ferrous sales volumes and expansion in metal margins. The improvements in production facilities also contributed to the strong quarterly performance.

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The company’s Cascade Steel and Scrap (CSS) business too delivered significantly improved results when matched with the first quarter of the previous fiscal. The segment reported an operating income of $8 million upon comparison with the loss of $3 million during Q1 fiscal 2017. The expansion in operating margins was mainly on the back of higher volumes, lower levels of rebar steel imports and ongoing productivity improvements.

The ferrous shipment volumes surged higher by 11% during the first quarter. Exports accounted for nearly 70% of total ferrous sales volume. Meantime, non-ferrous sales volumes were up by 3% over the previous year. The average ferrous net selling prices increased sharply by 51% during the quarter, whereas the non-ferrous net selling prices increased by 26%.

The finished steel net sales volume jumped higher by 26% over the previous year. The average net sales price for finished steel increased by 22% year-on-year. The operating income from the division totaled $8 million during Q1 this fiscal. The lower levels of rebar steel imports resulted in increased finished steel margins.