CARNEGIE, Pa. – Ampco-Pittsburgh Corporation (NYSE: AP) disclosed today that its subsidiary, Union Electric Steel Corporation, has secured contracts to supply rolls for two new rolling mill projects. The deals, valued at approximately $11.7 million, will support mills in Mexico and Scandinavia, with deliveries slated for the first half of 2025.
Ternium Mexico S.A. de C.V., a prominent steel producer in North America, has chosen Union Electric Steel to provide an initial mill fill of rolls for its new cold mill in Pesqueria, with a contract worth around $6.7 million. Additionally, a major European OEM mill builder constructing a new facility in Scandinavia has also contracted Union Electric Steel for rolls, a deal valued at approximately $5.0 million.
This announcement comes alongside the company’s update on its sales order backlog. Ampco-Pittsburgh’s Air and Liquid Processing segment reported a record-breaking quarter ending June 30, 2024, with new orders surging over 50% from the previous quarter. This marks the highest quarterly order intake in the segment’s history, attributed to strong demand in the Pharmaceutical and U.S. Military markets.
Brett McBrayer, CEO of Ampco-Pittsburgh, commented on the roll contract wins, emphasizing Union Electric’s commitment to delivering high-quality products to the global steel and aluminum markets. McBrayer also highlighted the company’s increased market presence, thanks to strategic investments in sales and manufacturing capacity.
The corporation projects its total backlog for the quarter ending June 30, 2024, to be in the range of $360 to $365 million, representing sequential growth of 3.2% to 4.6% compared to the previous quarter.
Ampco-Pittsburgh Corporation, through its subsidiaries, is known for manufacturing specialized metal products and equipment utilized globally. Its operating subsidiary, Union Electric Steel Corporation, is a leading producer of forged and cast rolls for the steel and aluminum industries. The corporation also produces air and liquid processing equipment and operates manufacturing facilities in the United States, England, Sweden, Slovenia, and joint ventures in China.
The information in this article is based on a press release statement from Ampco-Pittsburgh Corporation.
In other recent news, Ampco-Pittsburgh Corporation disclosed its Q1 2024 financial results, revealing a 5% year-over-year increase in net sales to $110.2 million. However, operational challenges, including a fire at a foreign cast roll facility and an unfavorable product mix in the Air and Liquid processing segment, led to a net loss of $2.7 million, or $0.14 per share. The company anticipates these issues to be resolved in the second quarter and expects improvements in market conditions in North America and Europe, along with higher pricing to counterbalance shipment volume declines for the year.
The company’s mixed first quarter also saw a decline in demand in the Forged and Cast Engineered Products segment in Europe, while the Air and Liquid Systems segment’s revenue grew by 18%. At the end of the quarter, the total backlog was $348.8 million, with declines in both major segments. Despite this, the company maintained a solid liquidity position with $10.8 million in cash and $23.2 million in undrawn revolving credit facility availability.
These recent developments indicate an expected increase in activity and outlook in North America and Europe, with volume growth anticipated in the second half of 2025, driven by increased roll buys from customers. Despite the challenges, Ampco-Pittsburgh remains optimistic about the future and continues to focus on increasing profitability and output in key segments.
InvestingPro Insights
Ampco-Pittsburgh Corporation’s (NYSE: AP) recent contract wins underscore its ongoing efforts to expand its global footprint and strengthen its order backlog. These positive developments may be of particular interest to investors, especially when considering the company’s current financial metrics and market performance. According to InvestingPro data, Ampco-Pittsburgh has a market capitalization of 15.1 million USD, indicating a relatively small player in the industry.
The company’s Price / Book ratio, as of the last twelve months leading up to Q1 2024, stands at 0.27, which suggests that the stock may be trading at a low valuation relative to the company’s book value. This could be a point of interest for value investors looking for potential opportunities. Moreover, despite a challenging period with a one-year price total return of -76.05%, the stock’s recent performance has shown a slight uptick with a 1-week price total return of 1.85%.
InvestingPro Tips highlight that Ampco-Pittsburgh is operating with a significant debt burden and is not profitable over the last twelve months. These factors are crucial for investors to consider, as they may influence the company’s ability to capitalize on new contracts and maintain financial stability.
For those interested in a deeper analysis, InvestingPro offers additional tips on Ampco-Pittsburgh’s performance, including insights on cash flow and revenue valuation multiples. There are currently 13 additional InvestingPro Tips available, which can be accessed through the dedicated page for Ampco-Pittsburgh at https://www.investing.com/pro/AP.
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