Steel Dynamics, Inc. announced first quarter 2020 financial results, reporting net sales of $2.6 billion and net income of $187 million. Comparatively, prior year first quarter net sales were $2.8 billion, with net income of $204 million. Sequential fourth quarter 2019 net sales were $2.4 billion, with net income of $121 million.
First quarter 2020 operating income for the company’s steel operations was $293 million, or 45 percent higher than sequential fourth quarter results, as record quarterly steel shipments more than offset metal spread compression, the company said, adding that with strong demand, volume increased across the steel platform for both flat roll and long products.
As a result of higher ferrous and nonferrous selling values and shipments, first quarter 2020 operating income from the company’s metals recycling operations increased to $8 million, compared to a loss of $5 million in the sequential fourth quarter, the company said.
Steel Dynamics said first quarter 2020 operating income from the company’s steel fabrication operations remained strong at $29 million, lower than near-record sequential fourth quarter results of $33 million, due primarily to seasonally lower shipments. The steel fabrication platform’s order backlog is strong, over 15 percent higher than a year ago, the company said.
As for an outlook, Mark D. Millett, President and Chief Executive Officer, commented, “We entered this crisis in a position of strength with ample cash and available liquidity,” stated Millett. “It is still too early to determine the full scope of the negative impact COVID-19 will cause to global economies and the related impact to domestic steel demand. At this time, domestic steel orders related to certain sectors have slowed considerably due to the temporary closures of numerous steel consuming businesses. In particular, the temporary closure of domestic automotive production and its related supply chain, as well as weakness in the energy sector, have reduced flat roll steel demand. Conversely, construction is the largest single domestic steel consuming sector and while some projects have been disrupted or postponed, at this time the sector still remains intact. Our steel order activity from construction customers, as well as our strong steel fabrication order backlog supports this sentiment. When states begin to ‘re-open’ across our nation, we believe steel demand will likely respond quickly based on current customer buying patterns and already low steel inventories throughout the supply chain.”