MRC Global sales climb 3% from Q1
MRC Global Inc. reported second quarter sales of $832 million, a 3% improvement compared to the first quarter of 2024.
MRC Global’s second quarter 2024 gross profit was $173 million, or 20.8% of sales, as compared to the second quarter 2023 gross profit of $175 million, or 20.1% of sales. Cash flow provided by operations of $63 million for the second quarter and $101 million in the first half of 2024
“We achieved sequential growth in revenue, adjusted EBITDA and cash flow from operations in the second quarter, despite slowing activity in the US oilfield and project delays in our DIET sector," said MRC Global President and CEO Rob Saltiel. "We have generated $101 million in operating cash flow through the first half of 2024, and we are tracking well to meet or exceed our annual operating cash flow target of $200 million.
"During the second quarter we repaid our Term Loan B and reduced our net debt to an all-time low of $103 million," he continued. "We expect to generate significant cash over the next few years, which should further strengthen our balance sheet and provide us flexibility to consider various capital allocation alternatives."
The company’s sales were $832 million for the second quarter of 2024, which was 4% lower than the second quarter of 2023 and 3% higher than the first quarter of 2024. Compared to the same quarter a year ago, the gas utilities and production and transmission infrastructure (PTI) sectors declined, partially offset by an increase in the downstream, industrial and energy transition (DIET) sector. Sequentially, company’s sales were up by 3%, due to increases in the Gas Utilities and PTI sectors, partially offset by the DIET sector.
U.S. sales in the second quarter of 2024 were $677 million, down $50 million, or 7%, from the same quarter in 2023. The Gas Utilities sector revenue decreased $34 million, or 11%, as customers reduced their own product inventory levels and executed fewer capital projects. PTI sector sales decreased by $25 million, or 11%, primarily due to lower line pipe sales and reduced customer spending levels. DIET sector sales increased $9 million, or 5%, due to mining, refining and chemicals customers' projects and turnaround activity.
Sequentially, as compared to the first quarter of 2024, U.S. sales increased $10 million, or 1%, driven by the U.S. Gas Utilities sector, which increased $22 million, or 8%, driven by increased customer spending due to seasonal increases and normalizing buying patterns. The PTI sector increased $2 million, or 1%, primarily due to a net increase in line pipe shipments for projects. The DIET sector decreased $14 million, or 7%, as a result of less turnaround buying in the second quarter.
Canada sales in the second quarter of 2024 were $33 million, down $5 million, or 13%, from the same quarter in 2023, as a decline in the PTI sector was partially offset by an increase in the DIET sector including a carbon capture project.
Sequentially, Canada sales were up $4 million, or 14%, from the prior quarter with improvement in both the DIET and PTI sectors.
International sales in the second quarter of 2024 were $122 million, up $16 million, or 15%, from the same period in 2023. The increase was driven by the PTI sector primarily in Norway, followed by the DIET sector in Europe including turnaround activity and offshore wind projects.
Sequentially, as compared to the previous quarter, International sales were up $12 million, or 11%, as the PTI and DIET sectors increased. The PTI sector increased as a result of projects in the North Sea while the DIET sector increased due to project and turnaround activity in Europe including offshore wind projects.
Sales by Sector
Gas Utilities sector sales, which are primarily U.S. based, were $287 million in the second quarter of 2024, or 35% of total sales, a decrease of $36 million, or 11%, from the second quarter of 2023.
Sequentially, as compared to the first quarter of 2024, the Gas Utilities sector sales increased $21 million, or 8%.
DIET sector sales in the second quarter of 2024 were $268 million, or 32% of total sales, an increase of $23 million, or 9%, from the second quarter of 2023. The increase in DIET sector sales was across all geographic segments.
Sequentially, as compared to the previous quarter, sales in the DIET sector were down $8 million, or 3%, due to declines in the U.S. segment partially offset by the International and Canada segments.
PTI sector sales in the second quarter of 2024 were $277 million, or 33% of total sales, a decline of $26 million, or 9%, from the second quarter of 2023. The decrease in PTI sales was due to declines in the U.S. and Canada segments partially offset by the International segment.
Sequentially, as compared to the prior quarter, PTI sector sales increased $13 million, or 5%, as all segments improved, driven by the International segment.
Backlog
As of June 30, 2024, the company's backlog was $636 million, a 10% decline from the previous quarter due to large project deliveries in the second quarter and project activity delays.
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