Toronto, Ontario-based Russel Metals Inc. announced net income of $5 million in the second quarter of 2020 on revenues of $588 million, compared to net income of $31 million on revenues of $937 million in the 2019 second quarter.
Revenues in the company’s metals service centers decreased 30 percent to $373 million for the quarter compared to $535 million in the same quarter in 2019. The average selling price declined 14 percent over the second quarter of 2019 and was consistent with the 2020 first quarter. Tons shipped were approximately 19 percent lower than the 2019 second quarter and 14 percent lower than the 2020 first quarter.
Revenues in the energy products segment decreased 50 percent to $149 million compared to $298 million in the 2019 second quarter. Historically low North American rig counts, and the wet Western Canadian spring impacted demand, the company said.
John G. Reid, President and CEO, commented, “Our Canadian energy operations were affected by the particularly lengthy spring break up due to abnormally wet conditions. Our US energy operations were adversely affected by the continued rig count decline. To date in the third quarter, the Canadian energy sector is experiencing some increases in rig counts. The countercyclical nature of our cash flows continued to generate significant cash with reductions in working capital generating cash of $95 million which supports our dividend. I also want to commend all of our employees for their continued efforts in adhering to our safety protocols in response to the pandemic as we remain committed to putting the health and safety of our employee group first and foremost.”