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Russel Metals hit by energy weakness, but plays down prospect of steel tariffs

TORONTO — Russel Metals Inc. reported ailing sales numbers this week, citing not only the COVID-19 pandemic but also low energy prices and drilling activity levels, along with weather delays.
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TORONTO — Russel Metals Inc. reported ailing sales numbers this week, citing not only the COVID-19 pandemic but also low energy prices and drilling activity levels, along with weather delays.

The Toronto-based company reported net income of $5 million, or 7 cents per share, on revenues of $588 million during the three months ending June 30.

That was down from the same period in 2019, when net income was $31 million, or 50 cents per share, on revenues of $937 million.

Still, earnings results were better than expected, as analysts polled by Refinitiv had forecast earnings of 3 cents per share.

The company also announced a quarterly dividend of 38 cents per share.

When asked on Friday about steel tariffs proposed by the U.S. government, CEO John Reid told financial analysts that the prospect of steel prices rising 25 per cent is "highly unlikely."

Despite this week’s tariff announcement, Reid said rising prices could actually be “helpful” for the company as it does little cross-border business, but that tariffs could also hurt demand and the company’s customer base.

This report by The Canadian Press was first published Aug. 7, 2020.

Companies in this story: (TSX:RUS)

The Canadian Press




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