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TMS International (TMS) reported 1Q EBITDA of $36.8m, ahead of the Street’s $34.6m and the adjusted $32.8m recorded in the year-ago period.

The yoy improvement was driven by new service contracts signed in 2011 at the Mill Services group, although the large start-ups in South Africa hurt EBITDA margins by 90 basis points.

Prior guidance for 2012 was reaffirmed, with EBITDA expected to total $142-148m, in line with the Street’s $145.39m.  In 1Q, TMS’ EBITDA margin (as a percentage of revenue after raw materials cost) was 23.6% and management expects to see normalized margins of 24-26% going forward on an annual basis.

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