Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) Q2 2020 Earnings Conference Call - Final Transcript
Apr 02, 2020 • 11:30 am ET
Thank you. [Operator Instructions] You first question comes from the line of Matthew Korn with Goldman Sachs.
Hey, Good morning, everyone.
Good morning. It's great to hear everyone sounding so healthy and good. Congratulations in the quarter. It's bittersweet that we seem to be coming from such great conditions, as the calendar year started off into the uncertainty. Could you comment a little bit right now, just on some of the conditions on the ground? You mentioned your facilities are open? Are you running with any reduced work force? Are you seeing any absenteeism? Any competition, are there any shredders being closed? What are you seeing there? And then as far as reduction in flows, again, maybe some comments there? What you're seeing? How we might be able to quantify it or frame that versus last quarter versus last year? Any of that would be helpful.
Sure. Thank you. And it's good to hear you as well, Matt. Glad that all is well. To-date, as we said in our prepared remarks, to-date COVID-19 has had limited impact on our operations. The most prevalent lever that we have been utilizing has been reduced operating hours. And as you may well imagine with our regional model, we have the flexibility to adjust operations at various sites and redirect flows. So we've seen limited date or limited impact to-date on operations. Supply flows is a bit different. I mean, we clearly have seen supply flows weaken in certain regions, but not uniformly across the country.
For the month of March, we were, for ferrous, pretty much flat year-over-year but clearly the last 10 days or so we saw a decreasing trend. April domestic prices haven't settled yet, as you know. And while scrap flows are lower generally due to reduced generation and some constrained logistics, we are hopeful that the April domestic pricing, when it does settle, will not exacerbate the lower supplies that we've already begun to see.
Good to hear you'll keep watch, another question. Richard loved your comment here. Thanks again for the update on the technology and what you plan not doing. How do you think about the viability of the cost savings measures that you're putting in place here that can be executed over the course of this year, even if volumes and activity levels really do profoundly decline, at least in the near-term?
Hi Matt. Glad to hear your voice. We've -- a lot of levers that we can access. As we said in our remarks, we've substantially completed the $50 million of benefits that we announced back in October for this year. We've got $6 million in the year to-date. The actions have already been taken, so we'll see the balance of that in the end of the year. And looking ahead, the majority of our costs are variable. And so as Tamara said, we're already in a position to flex hours and shut and other production dependent costs.
Our scrapped costs are variable so