Canam’s fourth-quarter profits more than double to $7.4 million on lower sales

MONTREAL – Structural steel provider Canam Group Inc. met expectations Wednesday as it reported a more than doubling of profits to $7.4 million in the fourth quarter despite a nearly 17 per cent drop in sales.

The Quebec-based company earned 18 cents per share for the period ended Dec. 31, up from seven cents per share or $3.3 million last year.

Sales were $238.5 million, down from $285.6 million.

For the full year, it reversed last year’s loss by earning $17 million, or 40 cents per share. That compared with a loss of $32.5 million, 72 cents per share in 2011. The 2011 results contained a $25 million after-tax provision related to work on BC Place.

Consolidated sales increased 2.8 per cent to $905.4 million, from $881 million in 2011.

Canam (TSX:CAM) was expected to earn 18 cents per share on $282 million of revenues in the quarter, according to analysts polled by Thomson Reuters.

For the full year, analysts forecast the company would earn 38 cents per share on $949.6 million of revenues.

Canam’s order backlog at year-end was $493 million, up from $462 million at the end of 2011.

Canam Group CEO Marc Dutil said the increase in sales in 2012 was primarily due to joist and steel deck activities in Canada and the United States, and to contributions by FabSouth, a U.S. subsidiary.

The bridge and structural steel fabricator, which has been struggling because of the slowdown in non-residential construction in North America, recently announced the sale of its 49 per cent ownership interest held since 2007 in a Chinese company, United Steel Structures Ltd., for US$13.5 million.

The buyers are two Chinese companies, Guangzhou Shipyard International Co. Ltd. and Glory Group Development Ltd.

United Steel operates a bridge and structural steel fabrication plant in Guangzhou, in southeastern China.

Canam said the transaction is in line with its strategy to “dispose of certain investments in order to focus on its core activities in North America” and follows the sale of its ownership interest in the Canadian joint venture, Amcan-Jumax, and the Canam Asia joint venture in 2012.

The company repurchased nearly 1.35 million of its shares last year, and 3.26 million shares since Nov. 1, 2011.

Canam said in December it won $55 million in new contracts to supply steel for building, bridge and structural projects in Canada and the United States.

Nearly half the value, or more than $26 million, is tied to a port dock being built in Quebec and two bridges in Wisconsin and Massachusetts.

Canam Group, which employs almost 3,500 people in Canada, the U.S., Romania, India and Hong Kong, specializes in designing and fabricating customized products for the construction industry focusing on buildings, structural steel and bridges.

On the Toronto Stock Exchange, its shares were up 13 cents at $7.39 in afternoon trading Wednesday.