Steel Dynamics, Inc. announced Wednesday first quarter 2016 net income of $63 million on net sales of $1.7 billion. Comparatively, prior year first quarter net sales were $2.0 billion, with adjusted net income of $40 million. Sequential fourth quarter 2015 net sales were $1.6 billion, with adjusted net income of $22 million.
"During the first quarter 2016, positive changes in the flat roll steel supply environment resulted in significantly improved sequential consolidated operating earnings, which increased over 175 percent to $132 million," said Mark D. Millett, President and Chief Executive Officer. "Flat roll steel import levels have declined and customer inventory levels are better matched with actual demand requirements, supporting higher domestic steel mill utilization. The domestic steel demand outlook is relatively unchanged and steady, with the heavy equipment, agricultural and energy markets remaining weak, while automotive continues to be strong and construction recovers.
"We saw improved volumes and profitability in all of our operating platforms for the first quarter 2016," continued Millett. "Our metals recycling operations returned to profitability as demand for ferrous scrap improved, which resulted in higher shipments and selling values. Likewise, our fabrication operations were supported with continued steady demand from the non-residential construction sector, achieving near record quarterly earnings. We are optimistic, as domestic steel industry dynamics seem to be shifting favorably. Our cash generation continues to be strong, resulting in record liquidity of $2.2 billion at the end of March 2016, providing a firm foundation for growth."
"We saw improved volumes and profitability in all of our operating platforms for the first quarter 2016," continued Millett. "Our metals recycling operations returned to profitability as demand for ferrous scrap improved, which resulted in higher shipments and selling values. Likewise, our fabrication operations were supported with continued steady demand from the non-residential construction sector, achieving near record quarterly earnings. We are optimistic, as domestic steel industry dynamics seem to be shifting favorably. Our cash generation continues to be strong, resulting in record liquidity of $2.2 billion at the end of March 2016, providing a firm foundation for growth."
As for an outlook on the next quarter, Millet commented: "Steel customer inventory levels have moderated and import levels have declined. When combined with steady underlying steel demand, the result has been some improvement in domestic steel producer utilization, yet industry utilization still remains below historical performance due to the issue of unfairly traded steel imports.”