FORT WAYNE — Steel Dynamics Inc. on Wednesday afternoon reported third-quarter 2019 net sales of $2.5 billion and net income of $151 million, or $0.69 per diluted share.
Comparatively, third-quarter 2018 net sales were $3.2 billion, with net income of $398 million, or $1.69 per diluted share. Second-quarter 2019 net sales were $2.8 billion, with net income of $194 million, or $0.87 per diluted share.
“Our third-quarter 2019 consolidated operating income was $228 million and adjusted EBITDA $315 million,” said Mark D. Millett of Auburn, SDI’s president and CEO. “The team delivered a solid third-quarter performance in a challenging steel pricing environment, as average steel pricing declined in the quarter, more than offsetting the benefit of lower scrap costs.”
Looking ahead, Millett added, “Steel customer inventory destocking has subsided, and underlying domestic steel demand remains principally intact for the primary steel consuming sectors, with particular strength in construction, as supported by our continued seasonally strong steel fabrication backlog.”
The company generated strong cash flow from operations of $444 million during the third quarter 2019 and increased liquidity to a record high $2.4 billion, a news release said. The company paid cash dividends of $53 million and repurchased $115 million of its common stock during the third quarter 2019.
“We are pleased by the recent rating upgrades to an investment0grade credit by all three credit rating agencies,” said Theresa E. Wagler, executive vice president and chief financial officer.
Third-quarter 2019 operating income for the company’s steel operations was $240 million, or 19 percent lower than second-quarter 2019 results. SDI operates its original steel mini-mill southwest of Butler.
The third-quarter 2019 average external product selling price for the company’s overall steel operations decreased $70 to $809 per ton. The average ferrous scrap cost per ton melted at the company’s steel mills decreased by $41 to $275 per ton.
Third-quarter 2019 operating income from the company’s metals recycling operations decreased to $3 million, compared to $11 million in the sequential second quarter, primarily as a result of the continued decline in aluminum demand and associated selling values. SDI operates an OmniSource recycling center in Auburn.
Third quarter 2019 operating income from the company’s steel fabrication operations was a strong $35 million, or 15 percent higher than sequential second quarter results. SDI operates a New Millennium Building Systems plant in rural Butler. The steel fabrication platform’s order backlog remains strong, and customers remain optimistic concerning nonresidential construction projects, the company said.
“Based on domestic steel demand fundamentals, we are constructive regarding 2020 North American steel market dynamics,” Millett said.
“We believe North American steel consumption will experience modest growth and will be supported by further steel import reductions and the end of steel inventory destocking. We believe current trade actions could have a positive impact in further reducing unfairly traded steel imports into the United States, including coated flat roll steel, which could have a significant positive impact for Steel Dynamics, as we are the largest nonautomotive flat roll steel coater in the United States.”.