PITTSBURGH TMS International Corp. expects increased domestic steel consumption in the coming year, primarily driven by the automotive, energy and construction markets.
Automotive demand is expected to surpass 15 million units for the first time since 2007, and the energy sector looks steady, president and chief executive officer Raymond Kalouche said during a Feb. 14 conference call on the companys fourth-quarter and full-year 2012 earnings results.
Kalouche expects domestic steelmakers to register an average 77-percent utilization rate this year, and sees the companys overall growth increasing between 5 and 10 percent in 2013.
The Pittsburgh-based mill services provider and owner of Tube City IMS Corp. saw net income attributable to common shareholders slip 1.4 percent to $6.06 million from $6.15 million a year earlier on a 13.1-percent drop in revenue to $536.8 million from $617.5 million.
For the full year, net income attributable to common shareholders of $26.1 million rose 49.2 percent from $17.5 million in 2011 on revenue that fell 5.1 percent to $2.53 billion from $2.66 billion.
"We are pleased that our financial results are right in the middle of our full-year public guidance," Kalouche said in a statement. "Our revenue and Ebitda (earnings before interest, taxes, depreciation and amortization) were up year over year despite a very challenging environment in the industry for much of the year."
Conditions throughout the year were driven by fluctuating steel volumes, Kalouche said during the call. "October was one of the softest months we have experienced in the last few years," he said.
Fourth-quarter run rates at domestic mills that TMS serviced averaged 67.1 percent vs. an average of 70.3 percent in the year-ago quarter. In North America, fourth-quarter 2012 rates were 70.4 percent, down slightly from 70.8 percent in the fourth quarter of 2011 as mills took maintenance outages while waiting for demand to rebound.
Demand has been on the upswing since then and is now in the 75-percent range, Kalouche added.