Nucor calls 2022 most profitable year ever

Charlotte, North Carolina-based electric arc furnace (EAF) steel producer Nucor Corp. has announced consolidated net earnings of $1.26 billion for the fourth quarter of 2022 and full-year net earnings of $7.61 billion.

The company says the annual earnings figure surpasses its previous record of consolidated net earnings of $6.83 billion in 2021. “I am proud to report that 2022 was both the safest and most profitable year in Nucor history,” Nucor President and CEO Leon Topalian says.

Lower ferrous scrap prices helped Nucor maintain profitability in the fourth quarter. The average scrap and scrap substitute cost per gross ton used in the fourth quarter of 2022 was $427, which Nucor calls a 15 percent decrease compared with $502 in the prior quarter. That $427 per ton figure also is 16 percent lower compared with a $508 per ton of scrap in the fourth quarter of 2021.

However, Nucor’s $1.26 billion net earnings figure for the final quarter of 2022 was down from net earnings of $1.69 billion in the third quarter of last year. It also was lower than the $2.25 billion earned in the fourth quarter of 2021.

Tax credits earned for capital projects underway contributed an after-tax net benefit of $60.4 million in 2022, says the company. In the full year 2022, however, pretax preoperating and startup costs related to its capital projects were approximately $247 million, according to Nucor.

Topalian says Nucor’s record-breaking profitability numbers “are a testament [to] the world-class performance of the 31,000 Nucor teammates that live our culture every single day. We believe Nucor’s steel and steel products with lower greenhouse gas intensity will be essential building blocks to our nation's clean energy future, security and productivity for years to come.”

The company says its total steel mill shipments in the fourth quarter of 2022 decreased 13 percent compared with both the third quarter of 2022 and the fourth quarter of 2021.

For the full year 2022, Nucor says its consolidated net sales of $41.51 billion increased 14 percent compared with consolidated net sales of $36.48 billion in 2021. Total tons shipped to outside customers in 2022 weighed in at approximately 25.52 million tons, which Nucor says is a 10 percent decrease compared with 2021. The average selling price per ton of what it shipped in 2022, however, increased by 26 percent compared with 2021.

The company says its mill operating rates decreased to 70 percent in the fourth quarter of 2022 compared with 77 percent in the prior quarter. That figure also is down significantly from an 89 percent capacity rate in the fourth quarter of 2021.

In the fourth quarter of 2022, Nucor lost nearly $142 million in its raw materials segment (which includes scrap yards operated by its David J. Joseph Co. subsidiary).

Although Nucor cited lower selling prices for raw materials, the scrap market was just one of three contributing factors. Nucor says the decline was “primarily due to decreased profitability at our direct reduced iron (DRI) facilities, both of which experienced planned outages during the fourth quarter” and a $96 million accounting write-off of Nucor’s leasehold interest in “unproved oil and gas properties.”

Looking ahead, Nucor says the profitability of its steel mills segment “is expected to increase in the first quarter of 2023 as compared with the fourth quarter of 2022 due to higher margins and volumes, with the largest improvement expected to occur at our sheet mills.”

In the raw materials segment, Nucor says it also expects increased profitability early this year compared with the fourth quarter of 2022 and cites predicted higher volumes at its DRI facilities and at its scrap recycling and brokerage operations.

“Looking ahead to 2023, while we recognize there is uncertainty about the near-term United States economic outlook, we’re starting to see a number of demand drivers gathering momentum, including the reshoring of manufacturing, large infrastructure investments and grid modernization," Topalian says.