1. Metals Recycling Business
Our Metals Recycling Business shipped record ferrous volumes of 5.3 million tonnes, up 26% from the prior year, and record nonferrous volumes of 569 million pounds, up 19% from the prior year.
Mr Tamara Lundgren president & CEO of Schnitzer Steel Industries Inc said that "MRB shipped record ferrous and nonferrous volumes during the fourth quarter and for the full year in fiscal 2011. In the fourth quarter, profit was driven by strong inflows, our larger footprint due to recently completed acquisitions, and contributions from our investments in technology which yielded higher nonferrous recovery."
Ferrous sales volumes of 1.5 million tonnes in the fourth quarter increased 5% sequentially from strong third quarter levels, primarily due to increased supply flows from our expanded markets and incremental volumes from recent investments. Nonferrous sales volumes of 191 million pounds increased 32% sequentially, benefiting from increased production from enhanced processing technologies, increased raw material purchases and contributions from our recent acquisitions.
Export customers accounted for 82% of total ferrous sales volumes. Our ferrous and nonferrous products were shipped to 18 countries in the fourth quarter. The top export destinations were China, Turkey, Malaysia and Egypt.
Continued strong demand in the export markets drove average ferrous net sales prices which approximated third quarter levels while remaining significantly higher than during the fourth quarter of fiscal 2010. Nonferrous prices also improved year over year due to stronger demand for recycled metals, but declined slightly on a sequential basis. Average ferrous and nonferrous prices increased 30% and 29%, respectively, compared to prices in the prior year quarter.
Operating income per ferrous ton was USD 34 in the fourth quarter of fiscal 2011, an increase of 82% from the prior year quarter and 8% sequentially. Average operating income per ton for the full year 2011 was USD 31, an increase of 10% from fiscal 2010.
The following summary of management's outlook for the Metals Recycling Business in the first quarter of fiscal 2012 is subject to uncertainty that may affect future results.
Ferrous sales volumes are expected to approximate 1Q11. Nonferrous volumes are expected to increase 20% from 1Q11 primarily due to incremental contributions from acquisitions and technology investments. As always, quarterly sales volumes are highly dependent upon the timing of shipments.
Ferrous average net selling prices are expected to be significantly higher than 1Q11. Nonferrous average net selling prices are expected to be slightly higher than 1Q11.
Operating income per ferrous ton expected to approximate 1Q11 levels despite the negative impact of average inventory costs.
2. Auto Parts Business
Our Auto Parts Business delivered strong operating results in the fourth quarter of fiscal 2011, increasing scrap and core sales as well as inflows from car purchases.
Mr Lundgren said that "Throughout fiscal 2011, APB delivered strong operating margins and continued to expand its platform. APB continues to demonstrate a successful ability to efficiently source supply, drive customer admissions and maximize the value chain of parts, cores and scrap."
Revenues increased 47% from the prior year quarter and 8% sequentially. Both comparisons reflect the impact of higher commodity prices on revenues from scrap and core sales, higher car volumes and the benefits from the acquisitions completed during fiscal 2011.
Operating margins of 18% during the fourth quarter continued the strong results achieved throughout fiscal 2011. Margins declined sequentially due to typical seasonality, but increased 260 basis points as compared to the prior year fourth quarter. For the full fiscal year, operating margins were 20%.
The following summary of management's outlook for the Auto Parts Business in the first quarter of fiscal 2012 is subject to uncertainty that may affect future results.
Revenues: Revenues are expected to increase 20-30% from 1Q11 levels due to higher prices and increased sales of parts, core and scrap, including incremental benefits from acquisitions.
Operating margins are expected to decline compared to 4Q11 due to the impact of lower commodity prices for scrap and core sales as well as a negative impact from average inventory costs.
3. Steel Manufacturing Business
Steel Manufacturing Business delivered USD 2 million in operating profit during the fourth quarter despite continued softness in the markets for long steel products on the West Coast.
Mr Lundgren said that “Our Steel Manufacturing Business achieved operating profitability for the quarter and full year, primarily driven by higher sales prices and higher sales volumes. We continue to maximize value from our product diversification and operational efficiencies."
Finished steel sales volumes of 124,000 tonnes increased 5% from the third quarter and 8% from the prior year quarter.
Average net sales prices for finished steel products increased 17% compared to the prior year quarter.
Higher sales prices resulted in positive operating margins during the quarter and for the full year.
The following summary of management's outlook for the Steel Manufacturing Business in the first quarter of fiscal 2012 is subject to uncertainty that may affect future results.
Sales volumes are expected to increase slightly from 1Q11 levels.
Average net sales prices are expected to increase from 1Q11, approximating 4Q11 levels.
First quarter operating margins are expected to improve from 1Q11, approximating break-even due to higher production levels.
Corporate Items
