Eregli Demir ve Çelik Fabrikalari (EREGL) Q3 2024 earnings summary

Executive summary

• Achieved $4.6 billion revenue, $572 million EBITDA, and $335 million net profit in the first nine months of 2024, with total production and sales of 5.9 million tons each.

• Crude steel production increased 32% year-over-year to 6.6 million tonnes, with capacity utilization rates rebounding to 93% for liquid steel and 92% for crude steel.

• Exports accounted for 20% of sales, returning to pre-earthquake levels, with export volume at 1.2 million tonnes.

• Turkish steel production rose 12% year-over-year, while domestic steel consumption fell 5%.

• The Group maintained its position as Türkiye's largest integrated flat steel producer, accounting for 24% of national crude steel output.

Financial highlights

• EBITDA per ton was $99 for the first nine months; full-year guidance is $80-$90 per ton.

• Net working capital increased due to higher inventories and raw material procurement, standing at $691 million at the end of 9M 2024.

• Net debt stood at $2.1 billion at September-end, with a net debt/EBITDA ratio of 2.8x.

• $769 million spent on capital expenditures in nine months, with full-year CapEx expected to reach $1 billion.

• Free cash flow for 9M 2024 was $950 million.

Outlook and guidance

• Targeting 8 million tons of sales for 2024, with a typical seasonal increase in Q4.

• EBITDA per ton expected to decrease to $80-$90 for the full year due to market conditions.

• Net debt/EBITDA ratio expected to rise to around 3x by year-end, then fall below 2.5x in 2025 as CapEx moderates and market conditions improve.

• CapEx for 2025 projected at $800-$850 million.

• Committed to reducing greenhouse gas emissions by 25% by 2030, 40% by 2040, and net zero by 2050.