Schnitzer Steel Industries (SSI) reported lower earnings during the second quarter of its fiscal 2020, however, they were still above its estimates.
The company made substantial progress in applying the productivity initiatives it announced in Oct 2019, and improved its operating performance and cash flow.
The auto and metals recycling (AMR) division reached $19mn in operating income in Q2 FY2020, improving significantly over its $2mn loss last quarter. The cascade steel and scrap (CSS) division achieved an operating income of $4mn in Q2 FY2020.
Both segments had improved sales volumes and benefited from initiatives implemented during the quarter. Moreover, the company achieved a positive operating cash flow of $6mn, aside from higher costs for raw materials.
SSI reported a total ferrous sale volume of 988,000gt (1mn mt) in Q2 FY2020, a 0.4pc decrease from 992,000gt in Q2 2019. However, it increased by 1.23pc from 976,000gt in Q1 FY2020. The company’s 2020 year-to-date ferrous sales were reported at 1.96mn gt.
AMR had 850,000gt in total ferrous sales during Q2 FY2020, up 2pc from 830,000gt in ferrous sales in Q1 2020. The segment posted 275,000gt in domestic ferrous sales during Q2 FY2020, increasing from 247,000 gt sold domestically during the first quarter of its fiscal. AMR’s ferrous export sales reached 576,000gt in Q2 FY2020, down from 583,000gt during the previous quarter.
CSS sold 129,000nt of finished steel products in Q2 FY2020 compared to 114,000nt of finished steel products sold one quarter earlier.
The scrap metal recycler posted $439.5mn in revenue for Q2 FY2020, down from $473.6mn during Q2 FY2019, but above its Q1 FY2020 revenue of $405.6mn.
Schnitzer reported $3.88mn in net income for the quarter, compared to last fiscal year’s Q2 net income of $12.9mn, and above the net income loss of $7mn reported in Q1 FY2020.
In a separate announcement, Schnitzer appointed Tamara Lundgren to the additional position of board chairman, succeeding John Carter, who will continue as a member of the board and chairman emeritus. Lundgren will continue to serve as president and chief executive officer of the company.