Russel Metals (RUS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues were $1.1 billion, up 1% sequentially but down from $1.2 billion in Q2 2023, with stable EBITDA margin despite steel price volatility.

• Net earnings for Q2 2024 were $50 million, EPS $0.84, and EBITDA $86 million, all slightly above Q1 but down from Q2 2023.

• Strong capital structure and liquidity, with net cash position of $237 million and available liquidity of $768 million at quarter-end.

• Samuel acquisition expected to close mid-August, with reduced inventory and post-closing cash flow benefits.

• Active capital allocation included share buybacks, a 5% dividend increase, and ongoing facility modernization projects.

Financial highlights

• Q2 2024 revenue: $1,072M (up from $1,061M in Q1 2024, down from $1,189M in Q2 2023).

• Q2 2024 EBITDA: $86M (8% margin), EBIT: $68M (6% margin), net income: $50M, EPS: $0.84.

• Six-month revenue ended June 30, 2024: $2.13B; adjusted EBITDA $170M (8%), net earnings $100M, EPS $1.66.

• Book value per share at June 30, 2024: $28.22, up $1.81 year-over-year.

• Q2 2024 cash from operating activities: $69M; capital expenditures: $24M in Q2, $48M YTD.

Outlook and guidance

• Q3 expected to be a transition quarter with margin and bottom-line pressure due to price/margin compression and fewer operating days.

• Margin recovery anticipated in early Q4 and into 2025, supported by price stabilization and facility upgrades.

• Samuel acquisition to close mid-Q3, with limited immediate bottom-line impact but expected to drive growth in 2025.

• Capex run rate for 2024 expected at $100M; five facility modernization projects underway.

• Medium-term growth anticipated from onshoring and infrastructure spending in North America.