Friday, November 8, 2013

Lee Metals Q3 results- generally within expectations

Lee metals report a glowing results from 1st glance, Compare to a year ago, 48% increase in net profits and YTD 68.6%

2012 is a weak year, I expect earnings to be good, they have delivered but they are some concerns.

QoQ Revenue fall from 180.9 million to 149.5 million.

The fall of revenue from steel merchandising is a given, but the rate of fall took me by surprise. QoQ turnover fall from 78 million to 48 million. Fabrication and manufacturing hold up well, with turnover of 100.7 million compare to 102 million last quarter. QoQ profits would have hold up as well as last quarter have it not been the big drop in the business of steel merchandising.

Lee metals is getting more and more like a fabrication and manufacturing company, although margins is better, I consider the merchandising arm a integrated part of its  business operations. 

Debt fall with inventory, and more cash get collected. No surprise there.

All in all, a result I would expect. Story intact.


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