Reliance Steel & Aluminum achieved record financial results in Q1 2021 on increased end-market demand, along with resulting sales, and foresees the upside continuing in Q2.
The California headquartered metal provider is hopeful on continued business condition improvements and strengthening demand in most areas it operates in, despite ongoing economic uncertainty from the COVID-19 pandemic.
Reliance expects metal pricing will stay close to existing levels, with the capacity to rise further in some products. The company assesses its average selling price in Q2 2021 will be up 5-7pc per ton sold, as the current metal price levels are considerably higher than the average selling price in Q1 2021.
However, the company estimates its tons sold will be flat to up 2pc in Q2 2021 versus Q1 2021. Issues affecting shipment volumes in Q1 2021 including metal supply limitations and interruptions to the supply chain impacting customers will continue in Q2 2021.
Based on prices and demand the company expects to see continued growth in its gross profit margin in Q2 2021. Reliance forecasts its non-GAAP earnings per diluted share will be in the range of $4.20-4.40 for Q2 2021.
The processor’s total tons sold fell by 4pc to 1.41mn nt (1.28mn mt) in Q1 2021 compared to 1.47mn nt in Q1 2020. Carbon steel tons sold tallied at 1.14mn nt in Q1 2021, down 3.2pc from 1.18mn nt in the prior-year quarter. Aluminum tons sold fell 8.8pc to 77,900nt in Q1 2021 against 85,400nt in Q1 2020.
Conversely, the company’s stainless-steel tons increased 2.1pc to 80,900nt in Q1 2021 from 79,200nt in the prior-year quarter.
Reliance’s net sales increased 10.3pc to $2.84bn in Q1 2021 compared to $2.57bn in Q1 2020. The company reached a gross profit record of $953.7mn in Q1 2021, up 22.2pc from $780.7mn in Q1 2020.
Pretax income also attained a record at $359mn in Q1 2021, up 332pc from $83.1mn in Q1 2020. The company’s net income surged by 326pc to $268.2mn in Q1 2021 compared to $62.9mn in Q1 2020.