CHICAGO Russel Metals
Inc. posted net income of Canadian $98.8 million ($98.61
million) last year, down 16.5 percent from C$118.3 million in
2011 despite an 11.4-percent jump in sales to just over C$3
billion ($2.99 billion).
fourth-quarter net income of C$20.4 million ($20.36 million),
down 28.4 percent from C$28.5 million in the same period a year
earlier, included income from oilfield equipment distributor
Apex Distribution Inc., which contributed $6 million in
operating earnings after Russel acquired it in November 2012
(amm.com, Nov. 9). But the positive contribution to
Russels energy-products segment was muted by C$4 million
in inventory write-downs by other energy operations due to
price declines in pipe products.
earnings by Russels metal service centers fell 21 percent
due to an industrywide drop in volumes in November and December
that went beyond expected seasonality. Operating earnings by
the steel distributor segment tumbled 40.5 percent due to soft
demand and tightening margins.
For metals distribution and
service centers, "markets are not giving a lot of direction on
demand and pricing," chief financial officer Marion Britton
said. "I would describe demand as sluggish." However, she added
that she expects both demand and pricing to improve in the
first quarter compared with the fourth quarter.
One thing that could change the
landscape, particularly for Russels Canadian operations,
would be approval of the Keystone XL pipeline, president and
chief executive officer Brian R. Hedges said.
For hot-rolled coil, the market
"is close to the bottom now," he said. "Right now, there is no
pricing power in the industry. Mills are struggling." He cited
margin compression in oil country tubular goods sales as well
as sheet. "It probably cant get any worse, so things can
only come up from here," he said.