Reliance Steel and Aluminum has an optimistic view on business conditions and has projected stronger demand in Q1 2021.
The California-based global metal provider estimates it will sell 10-12pc more tons in Q1 2021 compared to the last quarter of 2020 taking into account typical seasonal shipping volume increases. The company predicts its selling price per ton sold in Q1 2021 will average 12-14pc above Q4 2020 levels.
Reliance sees the current benefits in carbon and stainless-steel metals pricing remaining throughout Q1, on improved demand and weighty steel mill price hikes from Q4 2020 into this year. Thus, the company foresees attaining a higher gross profit margin in the first quarter of 2021.
Unexpected global challenges prevailed in 2020 due to the COVID-19 pandemic which was reflected in the weaker sales volumes for the year.
The metal processor’s aggregate tons sold fell by 10.8pc to 5.23mn mt in 2020 versus 5.86mn mt in 2019. The company sold 1.27mn mt in Q4 2020 down by 7.9pc compared to 1.38mn mt in Q4 2019.
Segment-wise sales
The company’s carbon steel sales dropped by 9.9pc to 4.24mn mt in 2020 compared to 4.7mn mt in 2019. Aluminum tons sold declined by 13.9pc to 293,900mt in 2020 against 341,400mt in the prior year. Stainless steel sales fell 5.9pc to 287,900mt in 2020 versus 306,100mt in 2019.
The company sold 1.03mn mt of carbon steel in Q4 2020 down 7.6pc from 1.11mn mt in Q4 2019. Aluminum tons sold during the same period fell by 12.1pc to 69,900mt from 79,500mt. Stainless steel sales declined by 0.3pc to 71,300mt in 2020’s last quarter against 71,500mt sold in Q4 2019.
Financials
The metal provider’s earnings tallied at $369.1mn in 2020, dropping by 47.4pc from $701.5mn in 2019. Net income fell by 21.7pc to $129.6mn in Q4 2020 from $165.6mn in Q4 2019. The company’s revenue declined by 19.7pc in 2020 to $8.8bn against $10.97bn in 2019. Revenue decreased by 12.8pc to $2.13bn in Q4 2020 versus $2.45bn in Q4 2019.