Vulcan Steel (VSL) H2 2024 earnings summary

Executive summary

• FY 2024 saw revenue decline 14.5% to NZ$1,064m, with volumes down 9.1% and gross profit per ton down 7% year-over-year, reflecting challenging market conditions in both Australia and New Zealand.

• EBITDA was NZ$148m, and adjusted net profit after tax was NZ$40m, both down over 30% year-over-year.

• Operating cash flow increased 16% to NZ$169m, and net debt reduced by NZ$64m to NZ$276m.

• Operating costs were reduced by 1.7% despite inflation and expansion activities.

• Client concentration decreased, with the top 20 clients now representing 9% of sales, down from 13%.

Financial highlights

• EBIT declined 33% year-over-year, and net profit after tax fell 55% year-over-year.

• Adjusted EPS was 30.4c, down 58% year-over-year.

• Gross margin was 35.2%, down 0.5 percentage points year-over-year.

• Final dividend of NZ$0.12 per share declared, total for the year NZ$0.24 per share, down 56% from FY23.

• Net capital expenditure for FY24 was NZ$24m; FY25 expected at NZ$30–35m.

Outlook and guidance

• First half FY25 volumes expected to be similar to second half FY24; improvement anticipated in calendar 2025 as monetary policy eases in New Zealand.

• No earnings guidance for FY25 due to ongoing market uncertainty; trading update planned for November 2024.

• Inflation remains embedded in costs, with particular pressure from rent and employee expenses.

• Ongoing focus on cost reduction, productivity, and customer engagement, especially in aluminum.