PITTSBURGH Metalico Inc.
posted a net loss in the first quarter, due in part to
overcapacity that has plagued the entire scrap metal industry,
the company said.
Metalicos $1.2-million net loss was in contrast to net
income of $2.2 million in the year-ago quarter on sales that
fell 16.1 percent to $137.7 million.
However, the companys top
executive said he was encouraged that Metalico had cut its
quarterly net loss in half from the preceding quarter.
"Sequential results in the first
quarter improved markedly over last years fourth quarter.
The company returned to positive operating income, albeit a
modest amount, signaling progress in efforts to improve
results," president and chief executive officer Carlos E.
The company has been able to
pare down its operating expenses primarily through reductions
in payroll and related fringe benefits, he said. The company
also is engaged in disciplined buying practices.
Overcapacity in the scrap
industry, especially in shredding, has become a serious
problem, Agüero said, adding that Metalico is taking a
hard look at the matter. In an effort to strengthen the company
as a whole, it is considering divesting, closing or swapping
underperforming assets, he said.
Ferrous scrap prices are at a
year-long low and appear to be at or near the bottom, but there
are no signs that nonferrous prices will rebound in the near
term, he said.
The bleak pricing scenario is
due to weak demand from U.S. and export scrap consumers, excess
finished steel capacity and imported steel offerings, the
Metalico streamlined its
operating segments effective Jan. 1, with its Platinum Group
Metals (PGM) and Minor Metal Recycling units absorbed by its
Scrap Metal Recycling unit.
Ferrous shipments reached
143,100 gross tons in the first quarter, up 4.8 percent year on
year and 12.4 percent higher sequentially. Meanwhile,
nonferrous shipments totaled almost 45.2 million pounds in the
quarter, down 9.2 percent year on year but up 8.8 percent from
the previous quarter.