Irving Texas headquartered Commercial Metals Company announced net earnings of USD 288.6 million on net sales of USD 2.4 billion for its fiscal fourth quarter ended 31 August, as compared to prior year period net earnings of USD 152.3 million on net sales of USD 2.0 billion. CMC Chairman of the Board, President and Chief Executive Officer Ms Barbara R Smith said “Fiscal 2022 was another year of exceptional performance for CMC, with record financial results, as well as meaningful advancement of our growth plan and our commitment to enhance shareholder distributions. The financial benefits of past and ongoing strategic actions were clearly demonstrated through record profitability and returns on invested capital. We expect our more-recent strategic initiatives, including the acquisition of Tensar, the construction of Arizona 2, and the announcement of a fourth micro mill to serve the Eastern US, will drive the next phase of our value accretive growth as we build on the solid operational foundation already in place.”Ms Smith added “Looking at the fourth quarter, we generated the second-best Core EBITDA in our Company's history, behind only the previous quarter. I am extremely proud of our continued solid execution, which has enabled us to fully capitalize on very strong market conditions in North America and to navigate the volatile conditions in Europe. The flexibility of our operations in Poland, and its low-cost operating structure relative to peers, positions CMC well to manage the challenging economic environment in Europe.”Demand for CMC's finished steel products in North America was again robust during the quarter, with several key internal and external indicators pointing toward continued strength. Downstream bid volumes, a significant indicator of the construction project pipeline, increased meaningfully from a year ago, resulting in year-over-year expansion of contract backlog levels. Demand from industrial end markets was stable, with conditions in most end-use applications unchanged from the sequential quarter, but improved compared to the prior year period. Shipment volumes of finished steel, which include steel products and downstream products, followed typical seasonal patterns and were down slightly from the prior year period, due largely to destocking activities by our customers as well as the slower pace of construction on numerous job sites stemming from staffing challenges. Europe end market demand was mixed during the quarter. Polish construction activity continued to grow on a year-over-year basis, while industrial production across Central Europe has contracted for several months. Volumes during much of the fourth quarter were negatively impacted by a supply chain destocking cycle that occurred in the wake of widespread safety stock procurement by end users and intermediaries following the outbreak of war in Ukraine. The purchase of safety stock meaningfully benefited CMC's shipments during the fiscal third quarter, but the fourth quarter experienced the opposite effect. This, however, appears to have subsided late in the quarter, as evidenced by a strong rebound in shipment volumes on both a sequential and year-over-year basis. The recent investment in a third rolling mill has positioned CMC's Europe segment well to navigate current volatility. The asset has provided improved operational and commercial flexibility, as well as enhanced margins by eliminating billet sales in favor of converting material to finished product.Ms Smith said “Looking ahead, we anticipate strong financial performance in the first fiscal quarter. Robust demand in North America for each of CMC's major product lines is expected to persist. Finished steel volumes are expected to follow typical seasonal patterns, which have historically declined modestly from our fourth quarter levels. Market conditions in Europe are more uncertain, given the ongoing energy crisis and slowing industrial activity. However, CMC is well situated to compete due to our cost leadership position and operational flexibility. Margins over scrap in both North America and Europe are likely to compress from fourth quarter levels in order to remain competitive with raw material price changes and increased long steel supply from imports."
Irving Texas headquartered Commercial Metals Company announced net earnings of USD 288.6 million on net sales of USD 2.4 billion for its fiscal fourth quarter ended 31 August, as compared to prior year period net earnings of USD 152.3 million on net sales of USD 2.0 billion. CMC Chairman of the Board, President and Chief Executive Officer Ms Barbara R Smith said “Fiscal 2022 was another year of exceptional performance for CMC, with record financial results, as well as meaningful advancement of our growth plan and our commitment to enhance shareholder distributions. The financial benefits of past and ongoing strategic actions were clearly demonstrated through record profitability and returns on invested capital. We expect our more-recent strategic initiatives, including the acquisition of Tensar, the construction of Arizona 2, and the announcement of a fourth micro mill to serve the Eastern US, will drive the next phase of our value accretive growth as we build on the solid operational foundation already in place.”Ms Smith added “Looking at the fourth quarter, we generated the second-best Core EBITDA in our Company's history, behind only the previous quarter. I am extremely proud of our continued solid execution, which has enabled us to fully capitalize on very strong market conditions in North America and to navigate the volatile conditions in Europe. The flexibility of our operations in Poland, and its low-cost operating structure relative to peers, positions CMC well to manage the challenging economic environment in Europe.”Demand for CMC's finished steel products in North America was again robust during the quarter, with several key internal and external indicators pointing toward continued strength. Downstream bid volumes, a significant indicator of the construction project pipeline, increased meaningfully from a year ago, resulting in year-over-year expansion of contract backlog levels. Demand from industrial end markets was stable, with conditions in most end-use applications unchanged from the sequential quarter, but improved compared to the prior year period. Shipment volumes of finished steel, which include steel products and downstream products, followed typical seasonal patterns and were down slightly from the prior year period, due largely to destocking activities by our customers as well as the slower pace of construction on numerous job sites stemming from staffing challenges. Europe end market demand was mixed during the quarter. Polish construction activity continued to grow on a year-over-year basis, while industrial production across Central Europe has contracted for several months. Volumes during much of the fourth quarter were negatively impacted by a supply chain destocking cycle that occurred in the wake of widespread safety stock procurement by end users and intermediaries following the outbreak of war in Ukraine. The purchase of safety stock meaningfully benefited CMC's shipments during the fiscal third quarter, but the fourth quarter experienced the opposite effect. This, however, appears to have subsided late in the quarter, as evidenced by a strong rebound in shipment volumes on both a sequential and year-over-year basis. The recent investment in a third rolling mill has positioned CMC's Europe segment well to navigate current volatility. The asset has provided improved operational and commercial flexibility, as well as enhanced margins by eliminating billet sales in favor of converting material to finished product.Ms Smith said “Looking ahead, we anticipate strong financial performance in the first fiscal quarter. Robust demand in North America for each of CMC's major product lines is expected to persist. Finished steel volumes are expected to follow typical seasonal patterns, which have historically declined modestly from our fourth quarter levels. Market conditions in Europe are more uncertain, given the ongoing energy crisis and slowing industrial activity. However, CMC is well situated to compete due to our cost leadership position and operational flexibility. Margins over scrap in both North America and Europe are likely to compress from fourth quarter levels in order to remain competitive with raw material price changes and increased long steel supply from imports."
