Steel Dynamics Reports Record Results
Article by KPC Media | KPC News | January 23, 2019
FORT WAYNE — Steel Dynamics Inc. on Tuesday reported its October-December and full-year 2018 financial results, including new annual records in several categories.
“The performance of the entire Steel Dynamics team was exceptional this year,” said Mark D. Millett of Auburn, president and chief executive officer. “We performed at the top of our industry, both operationally and financially.
Steel Dynamics said it set these new records in 2018:
• steel shipments of 10.6 million tons and steel fabrication shipments of 642,000 tons;
• net sales of $11.8 billion and operating income of $1.7 billion;
• net income of $1.3 billion; and
• annual cash flow from operations of $1.4 billion and EBITDA of over $2 billion.
The company awarded additional performance-based compensation of approximately $12 million to all nonexecutive, eligible employees in recognition of exceptional performance,
“We have a firm foundation for our continued long-term, strategic growth and value creation,” Millett said in a news release.
Steel Dynamics operates a steel mill and New Millennium Building Systems plant southwest of Butler and a branch of its OmniSource recycling division in Auburn.
“In 2018, the domestic steel industry benefited from a steady improvement in underlying steel consumption, based on strength from the automotive, construction and energy sectors. Increased steel consumption, coupled with generally lower finished steel imports, created a strong market environment,” Millett said.
SDI’s steel operations achieved record annual operating income of $1.9 billion, far surpassing last year’s record of $1.1 billion, the company said.
SDI’s metals recycling unit increased annual shipments and earnings and continued to reduce operating costs, resulting in annual operating income of $88 million.
“Our fabrication platform also achieved record annual shipments in 2018. However, higher average steel input costs resulted in metal spread compression throughout much of the year, resulting in annual 2018 operating income of $62 million, compared to 2017 operating income of $87 million. This represents a solid performance in a rising steel cost environment,” Millett said about the division that includes Butler’s New Millennium Building Systems. “Customer sentiment remains strong for our fabrication business, and the order backlog is even stronger now than it was at this time last year, which is a positive growth indicator for the nonresidential construction sector.”
During the fourth quarter, the company completed significant planned maintenance outages at both its Butler and Columbus Flat Roll divisions, which increased costs by an estimated $20 million and reduced flat roll shipments during the quarter.
“We believe the market dynamics are in place for domestic steel consumption to continue to increase this year,” Millett said. “Based on strong domestic steel demand fundamentals and continued customer optimism, we believe North American steel consumption will experience steady growth.”