In This Article:
-
Adjusted EBITDA: Nearly doubled to $17 million in Q4.
-
Nonferrous Sales Volumes: Increased by 13%.
-
Ferrous Sales Volumes: Increased by 12%.
-
Finished Steel Sales Volumes: Increased by 11%.
-
Operating Cash Flow: Positive at $4 million for Q4.
-
Capital Expenditures: $20 million in Q4; $76 million for fiscal '24.
-
Net Debt: $409 million at the end of Q4.
-
SG&A Expense Reduction: Down 7% compared to the prior year.
-
Rolling Mill Utilization: 97% in Q4.
-
Credit Facility: Capacity of $800 million, maturing in August 2027.
Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Radius Recycling Inc (NASDAQ:RDUS) nearly doubled its adjusted EBITDA to $17 million, showcasing strong sequential improvements.
-
The company successfully increased nonferrous sales volumes by 13%, ferrous sales volumes by 12%, and finished steel sales volumes by 11%.
-
The cost savings and productivity improvement program delivered substantial benefits, contributing to financial performance.
-
Investments in advanced metal recovery technologies are expected to yield over $40 million in annual EBITDA after full deployment.
-
The 3PR service and solutions business line is contributing over 10% to recycled metals volumes, aligning with secular growth trends.
Negative Points
-
Market conditions remained challenging with tight scrap availability and softer global steel demand creating significant headwinds.
-
The ongoing stickiness in scrap purchase costs led to margin compression in financial results.
-
Elevated levels of Chinese steel exports continue to pressure global steel production and ferrous scrap demand.
-
Auto production remains below pre-pandemic levels, impacting the supply flow and scrappage rates of end-of-life vehicles.
-
The company experienced elevated costs for certain ongoing legal matters, which are expected to be temporary.
Q & A Highlights
Q: Can you help parse out the sequential change in EBITDA, including volume contribution and price/cost on a unit basis? A: The $15 million sequential improvement in EBITDA was driven by increased volumes, which contributed slightly less than half of the improvement. The ramp-up in cost savings and productivity benefits accounted for around a third, and the rest came from higher nonferrous prices and expanded recycled metal spreads. - Stefano Gaggini, CFO
Q: Did you see any measurable change in the tightness of scrap flows during the quarter? A: We haven't seen any loosening in scrap flows. Current changes are primarily due to seasonality rather than benefits from interest rate reductions or changes in manufacturing. - Tamara Lundgren, CEO