The following is a summary of the Acerinox, S.A.(ANIOY) Q1 2024 Earnings Call Transcript:
Financial Performance:
Acerinox reported a satisfactory Q1 EBITDA of €111 million despite challenging market conditions.
The company generated €188 million in cash this quarter, largely due to inventory reduction of €89 million.
A significant reduction in net debt was seen, with a net financial debt of €234 million, the lowest in approximately 24-25 years.Acerinox's High-Performance Alloys division performed strongly, with an EBITDA of €31 million.
An operating cash flow of €76 million was achieved in the High-Performance Alloys division through an operating working capital reduction of €52 million.
The company holds a cash reserve of €1.9 billion and has additional €700 million facilities, providing robust liquidity.
Business Progress:
Acerinox reports ongoing challenges with a strike at its Spanish plant, slightly impacting the company's performance.
The company plans to temporarily cease production in their Bahru plant in Malaysia due to current Asian market prices.
Progress is being made in the acquisition of Haynes, with closure expected early in Q3.
Acerinox expects Q2 results to improve, despite ongoing strike issues at their Spanish plant.
Acerinox's working capital reduction demonstrated strong financial leverage this quarter, which is expected to last throughout the year.
The final regulatory approval for the Haynes acquisition is underway, with an expectation of a third-quarter completion.
The company predicts achieving €71 million in synergies from the Haynes acquisition.
Capital expenditures are expected to rise in subsequent quarters due to projects in North America and others related to high-performance alloys.
Acerinox projects continued demand for its VDM high-performance alloys without expecting significant metal effects, with an annual budget of around €125 million.
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