Steel Dynamics Inc. (NASDAQ/GS: STLD) today announced its financial results for the first quarter of 2022. The company reported first-quarter 2022 net sales of $5.6 billion and net income of $1.1 billion, or $5.71 per diluted share. Excluding the impact of the following factors, the company’s adjusted net income for the first quarter of 2022 was $1.2 billion, or $6.02 per diluted share.
This compares to the company’s Q4 2021 consecutive earnings of $5.49 per diluted share and adjusted diluted earnings per share of $5.78, excluding additional company-wide performance-based compensation of approximately $0.08 per diluted share contributed to the company’s charitable foundation of $0.04 per diluted share. and $0.18 for the diluted share of costs, less capitalized interest associated with the construction and operation of a flat steel mill in Texas. Diluted earnings per share in the first quarter last year were $2.03 and adjusted diluted earnings per share were $2.10, excluding $0.07 per diluted share less capitalized interest associated with the construction of a flat steel plant in Texas .
Mark D. Millet, Chairman, President and CEO, said, “The team delivered another amazing performance, posting record operating and financial results for the quarter, including record sales, operating income, operating cash flow and adjusted EBITDA.” Q1 2022 operating income was $1.5 billion and adjusted EBITDA was $1.6 billion. This record high demonstrates our highly diversified value-added closed-loop model as the strength of our steel business not only offsets our flat steel business. rolled products, but also the value of realized sales of hot rolled coil decreased in the quarter compared to the peak in 2021. Flat steel prices have recently risen due to extended and tight delivery times associated with strong demand dynamics, higher entry costs and a global disruption in the supply of rolled products. Automotive, construction and industrial sectors continue to lead in steel demand We are also starting to see that demand for steel from the energy sector has increased significantly.
“We also generated a record operating cash flow of $819 million in the first quarter of 2022 by increasing shareholder payouts, investing in growth, and supporting elevated working capital requirements based on market dynamics and increased volume,” Millett said. “In February, we increased our quarterly cash dividend by 31% and approved an additional $1.25 billion share buyback program, reflecting our confidence in the consistency and strength of our cash generation, in line with our unanimous growth plans.
“These teams delivered strong operational and financial performance across all of our operating platforms,” Millett continued. “First quarter operating income from our steel and metal processing business remained very strong at $1.2 billion and $48 million, respectively. realized sales value and continued strong construction demand. Steel beam and deck prices and order activity continued to be strong, supporting our record backlog with higher forward prices.
Operating income from the company’s steel business remained strong at $1.2 billion in the first quarter of 2022, but declined from a record $1.4 billion in the fourth quarter. The decline in earnings was due to a reduction in metal spreads in the company’s flat products business due to lower hot rolled coil prices. On the other hand, price and metal spreads are widening in the company’s long products segment. The average selling price of the company’s steel business in foreign markets decreased by just over $100 quarter-on-quarter to $1,561 per tonne in the first quarter of 2022. The average cost of a ton of iron scrap smelted at the company’s plants decreased by $16 qoq to $474 per ton.
Operating income from the downstream business remained strong in the first quarter at $48mn, slightly higher than the consistent results in the fourth quarter, as improved metal spreads more than offset a slight decline in shipments.
The company’s steel business reported a record first-quarter 2022 operating profit of $467 million, almost double the previous quarter, as significantly higher sales volumes and strong deliveries more than offset slightly higher steel production costs. The non-residential construction sector remained strong, leading to record underperformance and record forward prices for the company’s steel platform. Based on this momentum, the company expects this momentum to continue into 2022.
Based on the company’s differentiated business model and high cost structure volatility, the company generated $819 million in operating cash flow during the quarter. The company also made a capital injection of $159 million, paid a cash dividend of $51 million and bought back $389 million of outstanding shares of common stock, representing 3% of shares outstanding, while maintaining high liquidity on the 31st. $2.4 billion.
“We remain confident that market conditions will allow domestic steel consumption to remain strong this year and into 2023,” Millett said. “Order activity continues to be strong across all of our divisions. We believe that steel prices will continue to be supported by strong demand, balanced customer inventory levels and rising raw material prices. Demand from the construction industry is leading this year. Our backlog of structural steel fabrication orders and future price levels remain at record levels. This, combined with continued strong order activity and broad customer optimism, is supporting strong growth in the construction industry Overall demand dynamics We We believe this overall momentum will continue and our second quarter 2022 consolidated earnings should be another quarterly record.
“We believe there are strong drivers for our continued growth and strong position. Operations at our new Sinton flat mill continue to ramp up. The team has done a good job commissioning and running the mill. Based on our current forecasts, we estimate deliveries will be around 1.5Mt in 2022. We will also invest about US$500M to build 4 more value-added flat coil coating lines, including two painting lines and two galvanizing lines, using Galvalume® coating capabilities, one of which will be located at our new steel mill in Texas, will provide our new steel mill in Texas with the same diversification and higher margins as our two existing flat products divisions Two additional production lines will be located at our plant at Flat Products Manufacturing in Heartland Terre Haute Division tons in Indiana to support growing demand for coated flat products in the region and further increase diversification and cash flow from our existing facilities for the Midwest business. 2023.
“We are committed to the health and safety of our teams, families and communities while meeting the current and future needs of our customers. Our culture and business model continue to positively differentiate our work from other companies in the industry. focused on creating long-term sustainable value,” Millett concluded.
Steel Dynamics Inc. will hold a teleconference on Thursday, April 21, 2022 at 9:00 AM ET to discuss the operating and financial results for the first quarter of 2022. You can access the phone and find connection information in the Investors section of the corporate web website www.steeldynamics.com. Recall will be available on our website until April 27, 2022 at 11:59 pm ET.
Based on estimated annual steel making and metal processing capacity, Steel Dynamics is one of the largest domestic steel producers and metal processors in the United States, with operations in the United States and Mexico. Steel Dynamics manufactures steel products, including hot-rolled, cold-rolled and coated steel, structural steel beams and profiles, rails, structural special steel, cold-formed steel, commercial steel products, specialty steel sections, and steel beams and decks. In addition, the company also produces liquid iron and processes and sells ferrous and non-ferrous scrap.
The Company reports its financial results in accordance with US Generally Accepted Accounting Principles (GAAP). Management believes that adjusted net income, adjusted diluted earnings per share, EBITDA and adjusted EBITDA, non-GAAP financial ratios provide additional meaningful information about the Company’s performance and financial strength. Non-GAAP financial measures should be considered in addition to, and not in lieu of, the results presented by the Company in accordance with GAAP. In addition, because not all companies use the same calculations, adjusted net income, adjusted diluted earnings per share, EBITDA and adjusted EBITDA included in this release may not be comparable to those of other companies.
This press release contains certain forward-looking statements about future events, including statements relating to domestic or global economic conditions, market conditions for steel and secondary metals, Steel Dynamics’ revenue, costs of purchased materials, future profitability and earnings, and new business operations. . Existing or planned facilities. We usually precede or accompany these statements with typical conditional words such as “anticipate”, “intend”, “believe”, “estimate”, “plan”, “endeavour”, “project”, or “anticipate”, or such words as as “may”, “will”, or “should” be considered “forward-looking” under the safe harbor protection of the Private Securities Litigation Reform Act of 1995 and are subject to a number of risks and uncertainties. These statements are made as of this date only and are based on information and assumptions that we believe to be reasonable as of this date about our business and the circumstances in which it operates. Such forward-looking statements are not guarantees of future results, and we undertake no obligation to update or revise such statements. Some of the factors that could cause such forward-looking statements to differ from expectations include: (1) domestic and global economic factors; (2) global steel overcapacity and steel imports, rising scrap prices; (3) pandemics, epidemics, widespread disease or other health problems such as the COVID-19 pandemic; (4) the cyclical nature of the steel industry and the industries we serve; (5) fluctuations and significant fluctuations in prices and availability of scrap metal, scrap substitutes, and we may not be able to pass on the higher costs to our customers; (6) the cost and availability of electricity, natural gas, oil or other energy sources are subject to fluctuations in market conditions; (7) increased environmental, greenhouse gas emissions and sustainability considerations or (8) compliance with and modification of environmental and remediation requirements; (9) significant price and other forms of competition from other steel producers, processors of scrap and alternative materials; (10) an adequate supply of resources for our metal processing. scrap metal business sources, (11) cybersecurity threats and risks to the security of our sensitive data and information technology, (12) the implementation of our growth strategy, (13) litigation and compliance, (14) unplanned downtime or equipment downtime; (15) government agencies may refuse to grant or renew certain licenses and permits required to operate our business; (16) Our senior unsecured credit facilities contain, and any future financing arrangements may contain, a restrictive (17) impairment effect.
In particular, see Steel Dynamics for a more detailed explanation of these and other factors and risks that could cause such forward-looking statements to differ, contained in our latest Form 10-K Annual Report, entitled “About Specific Forward-Looking Instructions for—See statements and risk factors in our quarterly 10-Q filings or in our other filings with the Securities and Exchange Commission. This information is publicly available on the SEC website at www.sec.gov and on the Steel Dynamics website at www.steeldynamics.com under “Investors – SEC Documents”.
Post time: Dec-03-2022