Russel Metals Q2 Earnings Call Highlights

Record Q2 performance: Revenue reached C$1.7 billion, up 37% year over year, while adjusted EBITDA climbed to C$154 million and adjusted EPS doubled sequentially to C$1.63. Service-center shipments exceeded 500,000 tons, supported by higher prices, stronger demand and improved margins.

Kloeckner integration is adding earnings potential: The acquired operations contributed approximately C$16 million of EBITDA in Q2, and management expects operational improvements and value-added investments to lift consolidated gross margins by 100 to 200 basis points over time.

Management remains optimistic on demand and capital allocation: Strong conditions are expected through Q3 and Q4, with extended lead times and activity in data centers, LNG, agriculture and energy.

Russel Metals ended the quarter with C$144 million of net debt, more than C$500 million of liquidity and plans for increased capital spending on facility modernization.

Russel Metals TSE: RUS reported record second-quarter revenue and steel service center shipments as stronger metal prices, broad-based demand and contributions from its Kloeckner acquisition lifted profitability. Executive Vice President and Chief Financial Officer Martin Juravsky said the company’s portfolio changes over recent years have reshaped its earnings profile. Since 2024, Russel Metals has deployed nearly C$700 million toward acquisitions and capital expenditures while selling C$90 million of non-core assets, he said.

“The Q2 results illustrate a new frame of reference for our earnings power when our business portfolio is combined with a favorable market environment,” Juravsky said.

Record revenue and higher margins Quarterly revenue reached a record C$1.7 billion, up 17% from the first quarter and 37% from a year earlier, according to Juravsky. Adjusted EBITDA rose to C$154 million from C$93 million in the first quarter, while adjusted earnings per share were C$1.63, about double the prior-quarter level. Reported earnings per share were C$1.43, with results affected by a C$15 million pre-tax mark-to-market expense on stock-based compensation.

The company’s adjusted figures exclude that item and a first-quarter gain from the sale of its Delta property. The steel service center segment recorded its first quarterly shipment volume above 500,000 tons. Shipments increased 6% from the first quarter, and same-store tonnage rose 6% from the second quarter of 2025, excluding Kloeckner contributions. Steel service center gross margin improved to 22.2% from 20.9% in the first quarter. Gross margin per ton increased C$71 sequentially to C$529, the highest level since 2023.

Juravsky attributed most of the margin improvement to the broader market environment, including higher prices and tight supply chains. Prices realized per ton rose 9% from the first quarter. Overall consolidated gross margin expanded by about 130 basis points from the prior quarter. Service center volumes added about C$13 million of EBITDA versus the first quarter. Higher margins contributed about C$37 million of EBITDA. Higher delivery costs and performance-linked incentive compensation increased costs by C$12 million. Energy field stores improved EBITDA by C$5 million, while steel distributors added C$10 million.

The former Kloeckner operations generated approximately C$16 million of EBITDA in the second quarter, double their first-quarter contribution. Juravsky said the acquired branches still have a lower margin profile than Russel Metals’ comparable operations, but management is seeing early progress and expects additional benefits from operational changes and capital investments. He said Kloeckner repres...