Nucor expects to report losses in Q2 before returning to profitability in the second half of the year.
The company’s Q1 2020 revenues fell by 8pc compared to the same quarter last year, but gained 10pc against a subdued Q4 2019.
Total steel mill shipments in the first quarter of 2020 increased by 8pc on an annual basis to 6.5mn nt (5.9mn mt) from 6mn nt in Q1 2019 and increased by 12pc against Q4 2019. The performance of Nucor’s steel mills segment in Q1 2020 increased compared to Q4 2019 due to increased volumes and higher average selling prices at sheet and bar mills. Steel mills shipped 5.2mn nt in Q1 2020 to outside customers, rising by 9pc compared to 4.8mn nt in the same quarter a year ago.
Steel mill shipments to internal customers comprised 20pc of total mill shipments in Q1 2020. It ran consistently with previous quarters— it was 20pc in Q1 2019 and 21pc in Q4 2019. Downstream steel product shipments to outside customers in the first quarter of 2020 increased by 13pc from Q1 2019, but only rose by 2pc from Q4 2019.
Of total shipments, which amounted to 6.5mn nt, 2.9mn nt were sheet (44pc), 2.2mn nt were bars (35pc), 684,000nt were structural (11pc), 610,00nt were plate (9pc), and 88,000nt were classified as “other” (1pc).
Average sales price per ton in the first quarter of 2020 decreased by 13pc compared to Q1 2019, and decreased by 1pc from Q4 2019. A total of 7.2mn nt were shipped to outside customers in Q1 2020, increasing by 6pc from 6.8mn nt Q1 2019 and by 11pc from Q4 2019.
Nucor announced consolidated net earnings of $20.3mn in Q1 2020, decreasing by 96pc from $501.8mn in the same quarter a year ago. Net sales declined by 8pc to $5.6bn in Q1 2020 compared to $6.1bn in Q1 2019. Consolidated net sales increased by 10pc against Q4 2019. The cost of product sold declined by 4pc to $5bn compared to the same quarter a year ago. The average scrap and scrap substitute cost per gross ton used in the first quarter of 2020 was $293, a 7pc increase compared to $275/gt in the fourth quarter of 2019 and a 17pc decrease compared to $352/gt in the first quarter of 2019.
Nucor has frozen or delayed about $500mn in capital spending for 2020, as demand declined because of the COVID-19 pandemic which places planned capital spending for the year closer to $1.5bn. The delayed expenditure will be reassessed once the market returns to normal. Nucor stated that it does not foresee widespread layoffs in the near future.