MRC Global reports healthy quarterly performance
MRC Global Inc. reported first quarter sales of $885 million, a 2% sequential increase from the fourth quarter of 2022 driven by the downstream, industrial and energy transition (DIET) sector, and a 19% improvement compared to the same quarter a year ago.
Net income was $28 million versus $10 million for the same period of 2022. The company's first quarter gross profit was $179 million, or 20.2% of sales, as compared to the first quarter 2022 gross profit of $136 million, or 18.3% of sales.
“I am very pleased with our strong performance in the first quarter," said Rob Saltiel, MRC Global’s president and CEO. "The sequential revenue improvement of 2% was higher than anticipated due to robust MRO and project activity, especially with our refining, chemicals, and LNG customers. We also delivered outstanding profitability with adjusted gross margins of 21.2% and adjusted EBITDA margins of 7.8%. Our backlog increased 2% sequentially and has grown 14% compared to March of last year.
“We are very optimistic about the remainder of 2023 bolstered by the strong start to the year and our growing backlog. Our first quarter results make us increasingly confident in our ability to deliver double-digit revenue growth, EBITDA margins exceeding 8%, and operating cash flow of at least $120 million.” from the same quarter in 2022. PTI sector sales increased by $43 million, or 24%, primarily due to increased activity levels in the Permian. DIET sector sales increased $41 million, or 24% from LNG projects, increased turnaround and maintenance spending for refining, chemicals and mining customers. The Gas Utilities sector revenue increased $38 million, or 14%, driven by increased activity levels related to our customers' integrity upgrade and smart meter replacement programs.
U.S. sales in the first quarter of 2023 were $740 million, up $122 million, or 20%, from the same quarter in 2022. PTI sector sales increased by $43 million, or 24%, primarily due to increased activity levels in the Permian. DIET sector sales increased $41 million, or 24% from LNG projects, increased turnaround and maintenance spending for refining, chemicals and mining customers. The Gas Utilities sector revenue increased $38 million, or 14%, driven by increased activity levels related to our customers' integrity upgrade and smart meter replacement programs.
Sequentially, as compared to the fourth quarter of 2022, U.S. sales increased $20 million, or 3%, driven by the DIET sector, which increased $28 million, or 15%, as LNG project and turnaround maintenance activity increased. The U.S. Gas Utilities sector was down 2% primarily due to the timing of deliveries and projects. PTI was nearly unchanged.
Canada sales in the first quarter of 2023 were $42 million, down $1 million, or 2%, from the same quarter in 2022, as declines in the DIET and gas utilities sectors offset an improvement in the PTI sector. Canada sales also include a $3 million unfavorable impact from weaker foreign currencies.
Sequentially, as compared to the prior quarter, Canada sales declined $4 million, or 9%, due to the timing of line pipe orders.
International sales in the first quarter of 2023 were $103 million, up $22 million, or 27%, from the same period in 2022 including an $8 million unfavorable impact from weaker foreign currencies. The increase was driven by the DIET sector primarily in the Netherlands, U.A.E., Singapore and U.K. followed by the PTI sector in the U.K., Norway, Singapore and Australia.
Sequentially, as compared to the previous quarter, International sales were unchanged after taking into account a $3 million favorable impact from stronger foreign currencies.
Sales by Sector
Gas utilities sector sales, which are primarily U.S. based, were $307 million, in the first quarter of 2023, or 35% of total sales, an increase of $36 million, or 13%, from the first quarter of 2022.
Sequentially, as compared to the fourth quarter of 2022, the gas utilities sector declined $12 million, or 4%, driven by the U.S. segment.
Downstream, industrial and energy transition sector sales in the first quarter of 2023 were $278 million, or 31% of total sales, an increase of $52 million, or 23%, from the first quarter of 2022. The increase in DIET sector sales was driven by the U.S. segment followed by the International segment.
Sequentially, as compared to the previous quarter, sales in the DIET sector were up $30 million, or 12%, driven by the U.S. segment.
PTI sector sales in the first quarter of 2023 were $300 million, or 34% of total sales, an improvement of $55 million, or 22%, from the first quarter of 2022. The increase in PTI sales was led by the U.S. segment, followed by International and Canada segments.
Sequentially, as compared to the prior quarter, PTI sector sales declined $2 million, or 1%, as small declines in the International and U.S. segments were partially offset by an increase in the Canada segment.
INDUSTRIAL SUPPLY MAGAZINE
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