Growing demand for steel and tightening supply is likely to aid Olympic Steel’s growth in Q4 2020. An anticipated improvement in steel prices could help the company end 2020 in a stronger position, the steelmaker indicated in its Q3 2020 earnings report.
Olympic’s performance improved in the last quarter compared with Q2 2020 after it created operational efficiencies amid recovery demand and metal prices, which were significantly impacted in H1 2020 due to the shutdowns related to the COVID-19 pandemic. The company indicated, that it had also accomplished its goals to improve inventory turns, cut expense run rates, and lessen debts.
The steel processor sold 672,133nt (609,749mt) of carbon flat steel products for the nine months ending September 30, 2020, down 14.8pc from 788,894nt during the same period last year. Carbon flat products sales declined by 9.8pc in Q3 2020 to 224,199nt from 248,521nt in Q3 2019.
The company’s specialty metals flat steel product sales declined by 16.8pc to 92,642nt in January-September 2020 compared with 111,389nt sold in January-September 2019. In Q3 2020 sales for this segment fell by 11.7pc to 33,735nt from 38,213nt in Q3 2019.
The metal provider noted that its Q3 2020 flat-rolled volumes rose by 23pc compared to the prior quarter and September volumes were near pre-pandemic levels.
Olympic’s sales revenue fell by 28pc to $902.6mn in January-September 2020 from $1.26bn during the same year-ago timeframe. The company’s revenue in Q3 2020 fell by 21.9pc to $299.9mn against $384mn during Q3 2019. The drop in sales was attributed to lower average sales prices and volumes during the quarter.
The steel supplier’s net loss stood at $7.38mn in January-September 2020, compared with a net income of $4.75mn in the same period last year. Net loss for Q3 2020 was $1.5mn against a net income of $591,000 in Q3 2019.