Tree Island Steel Announces Second Quarter 2021 Results and Declares Special Dividend
27 Jul 2021 17:00 ET
GlobeNewswire
Tree Island Steel (''Tree Island'' or the ''Company'') (TSX: TSL) announced today its financial results for the three month and six month periods ended June 30, 2021.
For the three month period ended June 30, 2021, revenues increased by $23.9 million to $74.4 million, compared to the same period in 2020, from higher demand and increased selling prices across all market segments. Gross profit for the second quarter increased to $16.8 million, from $5.9 million in the same period in 2020. With the higher gross profit, EBITDA amounted to $14.7 million, compared to $4.0 million during the same period in 2020.
For the six month period ended June 30, 2021, revenues increased by $32.8 million to $141.3 million when compared to the same period in 2020. The increase is primarily due to higher shipped volumes at increasing prices, with growth across all market segments. Gross profit increased to $29.5 million from $12.6 million in the same period in 2020. The higher gross profit also resulted in an EBITDA of $25.4 million, compared to $9.0 million during the same period in 2020.
The Company also announced that its Board of Directors today declared a one-time special cash dividend of $0.05 per share on the issued and outstanding Common Shares of the Company, payable on October 15, 2021, to holders of record at the close of business on September 30, 2021. This special dividend is in addition to the Company's regular quarterly cash dividend of $0.03 per share that is also scheduled to be paid on October 15, 2021.
"During the second quarter, we experienced ongoing market demand and customer inventory replenishment as a result of the progressive economic reopening, combined with globally tight supply conditions for steel wire rod, our primary raw material. Increased construction activities in both residential and non-residential sectors, as well as demand for multiple industrial OEM steel wire applications and agricultural products, supported improvement in sales volumes," said Remy Stachowiak, President and COO of Tree Island Steel. "However, the supply of steel wire rod remains constrained, as steel mills work towards increasing production and rebuilding inventory to support improved market conditions. These circumstances have driven both wire rod and manufactured wire products pricing towards historic high levels, as rising costs get transferred through the supply chain."
"The elevated pricing along with ongoing inventory and cost management across the business have had a favorable impact on gross profit in the quarter as well as first half of the year. As the steel supply chain rebuilds inventory and availability of product improves, we anticipate more balanced market conditions in the future. As such, we continue to closely manage our materials purchasing and inventory to align with market demand and production capability to support our customers in this dynamic environment, while remaining focused on protecting the health and safety of our employees throughout the reopening."
"We continue to build on the financial results of this second quarter from the healthy demand across all of our markets, and remain prudent in our approach towards raw materials purchasing in this supply constrained environment," said Amar S. Doman, Executive Chair of Tree Island Steel.