Canada-based Tree Island Steel is seeing strength in markets during Q3 but continues to remain cautious about the long-term effects of the pandemic on demand, especially, should future shutdowns occur.
The company increased sales in January-September 2020 and improved cost management and operational efficiencies to establish a stronger foundation, the company indicated in its earnings report. The steelmaker will continue to closely monitor working capital and cost structures to support its recovery.
Tree Island Steel’s revenue increased by 4pc to $161.7mn in the first nine-months of 2020 from the prior-year period. The volumes shipped by the company also increased due to growth in industrial, agricultural, and residential construction. Revenues in Q3 2020 increased by 7pc to $53.2mn compared to the year-ago quarter. Third-quarter revenues were 33pc of the three-quarters total.
Gross profit rose by 34pc to $19.2mn in January-September 2020 compared to the same period in 2019. Thus, the gross margin also increased from 9.2pc in 2019 to 11.9pc this year.
The steelmaker’s EBITDA increased by 93pc to $13.3mn in the nine-month period in 2020 compared to $6.9mn in 2020. In Q3 2020, EBITDA rose by 72pc to $4.3mn compared with the prior-year period.
Tree Island makes steel wire for a diverse group of customers. It installed a new welded wire mesh machine in Q1 2020 to broaden product offerings. The company operates as Tree Island Industries in Canada and Tree Island Wire in the US.