Steel Dynamics Break Records

Mark Millett.jpg
Article by KPC Media | KPC News | October 19, 2018 
FORT WAYNE — Steel Dynamics Inc. announced record-setting third-quarter 2018 financial results Wednesday evening.
The company reported third-quarter net sales of $3.2 billion and net income of $398 million, or $1.69 per diluted share.
Comparatively, 2017 third-quarter net sales were $2.4 billion, with net income of $153 million, or $0.64 per diluted share.
"The team delivered a tremendous third-quarter performance, once again attaining numerous operational and financial milestones," Mark D. Millett of Auburn, SDI’s president and chief executive officer, said in a news release.
"Our strong financial performance was the result of record steel shipments, average steel selling price improvement, and resulting metal spread expansion across our steel operations,” Millett said. “Underlying domestic steel demand remained strong. There was some temporary hesitancy in flat roll order activity based on customer sentiment and increased hot roll coil import levels. However, demand from major steel consuming sectors was steady, including construction, automotive, and energy.”
He said earnings from SDI’s metals recycling platform declined in the quarter as shipments and commodity prices declined. China's decision to ban certain grades of recycled material had a negative impact on nonferrous sales volume.
"Our steel fabrication platform achieved record shipments in the quarter, as nonresidential construction demand remained strong and customer sentiment positive. The order backlog remained at near record highs entering October," Millett said.
He said as evidence of the confidence in the company's outlook, the board of directors authorized an additional $750 million share-repurchase program in September, following the completion of its $450 million authorization in August 2018.
The third-quarter 2018 average product selling price for the company's steel operations increased by $56 to $988 per ton. The average ferrous scrap cost per ton melted increased by $4 to $352 per ton.

Third-quarter 2018 operating income attributable to the company's flat roll steel operations increased 5 percent. The company operates a flat-roll steel mill southwest of Butler.
The company's fabrication operations recorded third-quarter 2018 operating income of $13 million, compared to second-quarter results of $14 million, as record high shipments and improved average selling values were offset by continued higher average steel input costs, SDI said. The company fabricates steel at its New Millennium Building Systems plant southwest of Butler.
"We remain confident that macroeconomic and market conditions are in place to benefit domestic steel consumption in 2019," Millett said. "Based on strong domestic steel demand fundamentals and customer optimism, we believe steel consumption will continue to be strong.” 

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