The following is a summary of the Radius Recycling, Inc. (RDUS) Q3 2024 Earnings Call Transcript:
Financial Performance:
Radius Recycling reported a Q3 loss of $6.97 per share, significantly impacted by a $6.21 non-cash goodwill impairment charge and a deferred tax valuation allowance. Adjusted loss per share was $0.59.
Adjusted EBITDA for the quarter was $9 million, up from $3 million in the previous quarter.
Revenue and performance were bolstered by increased volumes in ferrous, non-ferrous, and finished steel, with notable improvements in non-ferrous sales prices and volumes, largely due to strengthening global demand.
Business Progress:
The company is continuing its investment in advanced metal recovery technologies expected to significantly enhance EBITDA.
Radius has launched a cost reduction and productivity program aimed at achieving $70 million in annual benefits.
They are expanding their recycling services through the 3PR service line and digital tools to increase volumes and customer recycling rates.
Significant capital investment is focused on technology enhancements and expanding recycling services, with CapEx for FY '24 projected between $75 million to $80 million.
Opportunities:
Expected recovery in global manufacturing and auto production, aligning with structural demand for low carbon technologies, presents a notable growth opportunity for Radius.
Advanced metal recovery technologies investments align with increased demand for non-ferrous metals, offering significant EBITDA potential once fully deployed.
Risks:
Current market conditions with compressed metal spreads and challenging scrap supply flows pose significant short-term risks.
Longer-term risks hinge on the cyclical nature of scrap supply flows and potential continued economic downturn impacting the volumes and operational leverage.
More details: Radius Recycling IR
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