Steel Dynamics, Inc.
CEO : Mr. Mark D. Millett
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q2 | -18.2% YoY | -34.3% | -25.6% | 2023-07-20 |
Theresa Wagler says,
Financial Performance
- Net income for Q2 2023 was $812 million or $4.81 per diluted share.
- EBITDA for Q2 2023 was $1.1 billion.
- Revenues for Q2 2023 were $5.1 billion, driven by increased realized steel selling values.
- Operating income for Q2 2023 was $1.1 billion, 27% higher than Q1 2023.
Steel Operations
- Steel operations generated strong operating income of $706 million in Q2 2023 due to metal spread expansion and near-record shipments of 3.2 million tons.
- Realized increased pricing and metal spread across both flat-rolled and long product steel operations.
Metals Recycling Operations
- Operating income from metals recycling operations was $40 million, consistent with Q1 2023 results.
- Increased shipments offset by lower metal spreads.
- Mexico recycling operations provide a competitive advantage for reliable supply and future increased scrap aluminum collection.
Steel Fabrication Operations
- Operating income for steel fabrication operations was $462 million in Q2 2023.
- Average pricing decreased 13% and volumes were steady.
- Steel joist and deck order backlog extends into Q1 2024.
- Backlog pricing remains strong and spot pricing remains resilient.
Capital Allocation and Cash Flow
- Liquidity as of June 30 was $3.5 billion.
- Cash flow from operations for the first half of 2023 was $1.5 billion.
- Capital investments for the second half of the year are expected to be in the range of $1 billion, primarily for aluminum flat-rolled investments and completion of four flat-rolled steel coating lines.
- Cash dividend was increased by 25% in February 2023.
- $606 million remained authorized for share repurchases under existing program.
Sustainability and Carbon Reduction
- Company is committed to carbon neutrality and has an actionable path towards achieving it.
- Sustainability and carbon reduction strategy is an ongoing journey.
Mark Millett says,
Financial Performance
- Cash from operations: $808 million
- EBITDA generation: $1.2 billion
- Improved investment-grade credit ratings
Aluminum Flat-Rolled Investments
- Making significant progress on investments
- Excitement within prospective customer base for supply chain solutions
- New and innovative offerings from a differentiated supplier
Safety Performance
- Continued safety improvement
- 81% of facilities incident-free in the quarter
- Focus on providing the best health, safety, and welfare for employees
- Team’s safety performance ahead of industry averages
- Goal of achieving zero injuries
Q & A sessions,
Steel Fabrication Business
- Continued strong performance with high expectations for the business
- Non-residential construction markets expected to remain strong
- Order backlog remains strong, extending into January 2024
- Expect second half 2023 volumes to be comparable to first half shipments
- Average pricing expected to remain elevated but possibly decrease 10-15% from the first half of the year
Metals Recycling Business
- Achieved a strong second quarter despite price declines
- Expect scrap pricing to fluctuate modestly in the second half of the year
- Mexican volumes provide a competitive advantage for raw materials
- Partnering with steel and aluminum teams to expand scrap segregation capabilities
- Increased recycled content of aluminum sheet products for margin enhancement
Steel Operations
- Record shipments of 3.2 million tons in the second quarter
- Steel production utilization rate of 93% compared to domestic industry rate of 76%
- Value-added diversified product offerings and supply chain solutions driving customer preference
- Strong backlog and good customer order entry
- Expectations of higher auto production output in 2023
Sinton Mill
- Achieved positive EBITDA for the second quarter
- Experienced equipment issues with the cast, but repairs underway
- Expect to restart and progressively ramp up to 80% run rate by the end of the year
- Market acceptance of the mill and strong customer interest
- Expected to add $650 million to $700 million of through-cycle annual EBITDA to the company
Expansion into Aluminum
- Developing a 650,000 metric ton aluminum flat roll facility in Columbus, Mississippi
- Serving sustainable beverage and packaging markets, including body and automotive sectors
- Targeting 300,000 tons of can, 200,000 tons of auto, and 150,000 tons of industrial product
- Maximizing aluminum recycled content and expanding scrap processing capabilities
- Expected rolling mill start-up around mid ’25 with total project cost of $2.5 billion
No bad stock 