WARSAW, Poland Schnitzer Steel Industries Inc.s metals recycling business recorded operating losses of $312 million for its fiscal year ended Aug. 31, in contrast to earnings of $64 million the previous year, on a 25-percent drop in revenue to $2.21 billion, which the company said will result in further layoffs and restructuring in the coming months.
"In light of continued market challenges, we are implementing additional cost-reduction and productivity improvement initiatives, which are targeted to further reduce our annual operating expenses by $30 million with approximately 70 percent expected to benefit fiscal 2014 performance and the full benefits achieved in fiscal 2015," president and chief executive officer Tamara Lundgren said in a statement Oct. 29.
A similar exercise in its 2013 fiscal year reduced annual operating expenses by $25 million and cut 300 jobs.
The measures will primarily target the Portland, Ore.-based companys metal recycling operations and will involve a combination of "reducing organizational layers, productivity improvements, procurement savings, internal synergies and other operating efficiencies."
The company anticipates incremental restructuring charges of $3 million to be incurred in fiscal 2014.
Schnitzer reported a 27-percent drop in ferrous scrap recycling revenue during its 2013 fiscal year to $1.68 billion from nearly $2.3 billion the previous year, with shipments falling to 4.3 million long tons at an average price of $358 per ton from 5.1 million tons at $415 per ton in fiscal 2012. Nonferrous recycling revenue declined 18.4 percent to $501.7 million from $614.5 million in the same comparison.
Overall, Schnitzer posted a net loss for the fiscal year, with the weaker recycling segment results offsetting gains in its steel manufacturing segment (amm.com, Oct. 29).