Service Centers
February 15, 2022
Friedman's Quarterly Results Reflect Hedging Loss
Written by Tim Triplett
With three quarters of its fiscal year in the books, Friedman Industries Inc. says it is on track to achieve a record year – but not without a few bumps in the road. The Texas-based steel processor and manufacturer reported a net loss of $2.96 million on sales of $51.66 million in its third quarter ended Dec. 31, 2021, after taking a $13 million loss related to its hedging of hot rolled coil futures.
“The historic rise in steel prices reached a peak in September 2021, and we experienced declining steel prices throughout the 2021 quarter,” said Friedman President and CEO Michael J. Taylor. “With prices starting to decline, we experienced physical margin contraction during the quarter, but margins remained well above historical averages. Our sales volume for the 2021 quarter was negatively impacted by customer reactions to the shift in steel prices. Physical results for the quarter were not enough to overcome the loss associated with our financial hedges.”
