Q2 2024 Stella-Jones Inc Earnings Call Transcript
Key Points
- Stella-Jones Inc (STLJF) reported an 8% increase in sales for the second quarter, surpassing $1 billion, driven by higher utility poles, railway ties, and industrial product sales.
- The company's operating income rose to $168 million from $149 million in Q2 last year, with EBITDA growing by 14% to $200 million.
- Utility pole sales increased by over 20%, benefiting from the Baldwin acquisition and strong organic growth.
- Stella-Jones Inc (STLJF) has a strong cash generation capability, enabling it to finance growth plans and maintain a solid financial position.
- The company is on track to meet or exceed its financial objectives for the 2023 to 2025 period, with a positive outlook for utility poles and railway ties.
- Sales in the residential lumber category decreased by $28 million compared to the same period last year, due to lower consumer demand and weak market prices.
- The company noted a slower pace of incremental purchases from some customers, impacting short-term sales growth.
- There is an expectation of lower sales activity for railway ties and residential lumber in the second half of the year.
- The sequential decrease in EBITDA margin was attributed to the product mix, particularly the lower proportion of residential lumber sales.
- Inflationary costs have increased the capital expenditure for the utility pole category, impacting overall financial planning.
Good morning, and thank you for standing by. Welcome to Stella-Jones' second quarter of 2024 earnings call. (Operator Instructions) I would like to remind everyone that this conference call is being recorded on Wednesday, August 7, 2024.
Please note that comments made on today's call may contain forward-looking information. And this information, by its nature, is subject to risks and uncertainties. Actual results may differ materially from the views expressed today.
For further information on these risks and uncertainties, please consult the company's relevant filings on SEDAR+. These documents are also available in the Investor Relations section of Stella-Jones' website at www.stella-jones.com.
Additionally, during this conference call, the company may refer to non-GAAP measures, which have no standardized meaning under GAAP and are not likely to be comparable to similar measures presented by other issuers. For more information, please refer to the company's latest MD&A available on Stella-Jones' website
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