Full Year 2024 Vulcan Steel Ltd Earnings Call Transcript
Key Points
- Vulcan Steel Ltd (ASX:VSL) achieved an EBITDA of $148 million and an adjusted net profit after tax of $40 million despite challenging market conditions.
- Operating cash flow increased to $169 million, reflecting reduced inventory and lower average material costs.
- The company successfully reduced operating costs by 1.7%, demonstrating effective cost management in an inflationary environment.
- Return on capital employed pre-IFRS was 20%, indicating strong financial performance despite market downturns.
- Vulcan Steel Ltd (ASX:VSL) has a diversified geographic and market segment spread, reducing dependency on a small number of clients.
- Volume was down 9% year-on-year, indicating a significant decline in sales activity.
- Gross profit per tonne decreased by 7%, reflecting pricing pressures and market challenges.
- EBITDA declined by 33% year-on-year, showing a substantial impact from reduced volumes and margins.
- Net profit after tax fell by 55% year-on-year, highlighting the financial strain from the tough economic environment.
- Steel revenue fell by 21%, and EBITDA for the steel segment dropped by 37%, indicating significant challenges in this core business area.
Thank you, and welcome, everybody. Can we move to slide 6, please, to start. Okay. Look, what I would first like to comment on is that the past 12 months has been a very challenging environment. This is reflected in our volume being down 9% and also our gross profit for dollars per tonne being down 7%.
These two statistics demonstrate the severity of the market downturn. Despite that, we made $148 million EBITDA and an adjusted net profit after tax of $40 million. One of the positives we had in the past year as we reduced operating costs by 1.7%, in the fact that we had 11 months of aluminum in '23 versus 12 months of aluminum '24. We also include in our cost or our expenses and development of our new sites for expansion. So the total reduction in operating costs, given the inflationary environment, we believe, is a credible result. In addition, ATAs for the second half '24 versus second half '23 was up 3.6%. Again, we believe that is worth noting.
The operating cash flow of $169 million was a
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