ATLANTA, May 19, 2015 /PRNewswire/ -- GreenParts International today announced first quarter 2015 results.
"The first quarter 2015 market environment was extremely challenging for the steel and metals recycling industry," said Asif Balagamwala, Chief Executive Officer.
The company believes that despite strong domestic demand for steel consumption, steel prices decreased significantly due to delayed customer orders caused by the volatility of scrap prices and inventory buildup due to an excess of imported steel.
"We strongly feel that the reduction in both steel and scrap prices, combined with strength in domestic steel consumption from industries such as construction, manufacturing, and automotive should support a stronger domestic steel industry later this year. Given that domestic steel prices have come down, we believe the levels of imported steel will decline. In addition, sustainable lower raw material costs and increased orders as customers' inventory excess reduces, will allow our customers to not only increase their order volume with us, but allow for much better guidance and continuity. Obviously, this will have a very positive impact on GreenParts," continued Balagamwala.
The Company's recycling operation recorded a loss for the first quarter 2015, based on lower metal spread caused by decreasing Ferrous prices that dropped as much as 30% in February, as well as reduced shipments due to lower domestic steel mill utilization. The company expects volume and margins to increase throughout 2015, as steel mill utilization is expected to improve and scrap price volatility to subside.
"We believe that we are in a transitional phase, and the overall recovery may be later in the year than we anticipated. However, as the expected reduction of steel imports continues, combined with sustained lower scrap prices, we anticipate our customers' orders to grow and to have greater clarity as to where our assets are best utilized. Ultimately, this will allow us to execute on our long term plan, as we feel we are poised for substantial growth," concluded Balagamwala.
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes," "belief," "expects," "intends," "anticipates," "will," or "plans" to be uncertain and forward looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the company's reports and registration statements filed with the Securities and Exchange Commission.
SOURCE GreenParts International Inc.