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Schnitzer Steel Industries Inc. has reported narrower profits and reduced revenue in the fourth quarter of its 2022 fiscal year, which ended Aug. 31. However, the Portland, Oregon-based scrap, auto salvage and steel mill company refers to its full-year results as the “second best fiscal year earnings” in the company’s history.
Schnitzer’s net income of $11 million in its fourth quarter was down 85 percent from the $76 million netted in the prior quarter, which ended May 31. The company’s observation that average ferrous and nonferrous net selling prices in its summer 2022 quarter decreased by 28 percent and 7 percent, respectively, likely played a role.
The company’s Sept. 1, 2021, to Aug. 31, 2022, fiscal year covers a stretch that included strong global steelmaking and scrap market conditions in the first half of that timeframe, followed by more turbulent conditions after Russia’s invasion of Ukraine late this February.
For the fiscal year, Schnitzer’s revenue of more than $3.48 billion marked a 26 percent increase compared with the approximately $2.76 billion of revenue in the 2021 fiscal year. On the net income front, the $172 million Schnitzer earned in its 2022 fiscal year marks just a slight rise from $170 million earned the prior year.
“Our results in fiscal 2022 were the second best in the company’s history,” Schnitzer CEO Tamara Lundgren says. “We stayed focused on our sustainability framework of ‘People, Planet and Profit,’ and made significant progress on our strategic initiatives. These include our investments in advanced metal recovery technology systems [and] two acquisitions in the Southeast, including our first metal shredding operation in the region.”
In the quarter covering this summer, Schnitzer says its ferrous sales volumes rose by 12 percent compared with the prior quarter, “primarily resulting from shipments delayed from the third quarter."
Compared to the previous quarter, nonferrous sales volumes were down by 8 percent, Schnitzer says, adding, “Ferrous and nonferrous sales volumes were impacted by tighter supply flows resulting from the drop in prices and the extended shredding operation outage at the company’s Everett [Massachusetts] facility."
Schnitzer says its electric arc furnace (EAF) steel mill in Portland “achieved an average utilization rate of 93 percent” during its fourth quarter, but “finished steel sales volumes were down 7 percent” from the prior quarter.
Looking ahead, Lundgren says, “Despite current headwinds, we expect the long-term structural trends for recycled metal demand to remain positive, supported by the transition to low-carbon technologies, the increased focus on decarbonization, and the expected funding related to the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, including ‘Buy Clean’ provisions.”
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