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• Operating Cash Flow: $81 million, with $34 million used to reduce debt.

• Revenue Decline: 13% decrease in the first half, due to 8% reduction in volume and 5% reduction in price achievement.

• EBITDA: Declined by 30% year-on-year.

• Gross Profit per Tonne: Fell by $89 year-on-year.

• Return on Capital Employed: Reported at 10.3% on a rolling 12-month basis, with a pre-IFRS16 basis at 15%.

• Debt Reduction: Reduced by $148 million, matching the debt-funded acquisition of aluminum for $149 million.

• Dividend Payout Policy: Adjusted to 40% to 80% of net profit after tax.

• Dividend Declared: $0.025 per share with 100% franking for Australian shareholders and 20% imputation credits for New Zealand shareholders.

• Number of Sites: 66 sites, with a slight reduction due to consolidation.

• Client Base: 22,500 clients, with top 20 clients representing around 9% of revenue.

• Geographic Revenue: Queensland and New Zealand combined represent roughly 60% of revenue; Victoria accounts for 11%.

• Warning! GuruFocus has detected 6 Warning Sign with ASX:VSL.

Release Date: February 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Vulcan Steel Ltd (ASX:VSL) reported a strong operating cash flow of $81 million, with $34 million used to reduce debt.

• The company successfully integrated its aluminum business, expanding its product range and geographic reach.

• Vulcan Steel Ltd (ASX:VSL) maintained a high level of customer service, resulting in a steady number of active trading accounts despite challenging market conditions.

• The company has reduced its debt by $148 million, aligning with its acquisition costs for the aluminum business.

• Vulcan Steel Ltd (ASX:VSL) has implemented 13 hybrid sites, enhancing operational efficiency and customer service capabilities.

Negative Points

• The company experienced a 13% decline in revenue due to an 8% reduction in volume and a 5% reduction in price achievement.

• EBITDA declined by 30% year-on-year, reflecting weaker market conditions.

• The New Zealand market faced significant economic challenges, with weak demand impacting performance.

• Victoria, representing 11% of revenue, is experiencing high costs and a lack of business confidence, affecting growth prospects.

• Inflationary pressures and high interest rates continue to impact operating costs and market conditions.

Q & A Highlights

Q: Rhys, regarding New Zealand pre-sales activity, how long does it typically take for these to come through, and what does the recovery look like? A: We've seen specific examples where large orders are placed, indicating a recovery starting from March. It's patchy but real, with some clients having orders for six to eight months. However, smaller clients in Auckland and Christchurch are still affected by high interest rates.