CAP (CAP) Q2 2024 earnings summary

Executive summary

• Announced indefinite suspension of Huachipato steel operations after sustained losses, with a $336M one-time restructuring provision impacting results.

• Consolidated net income for 2Q24 was -$312M, mainly due to Huachipato's provision.

• The group operates in mining, steel, steel processing, and infrastructure, with a diversified portfolio of subsidiaries across Chile, Peru, Argentina, Brazil, Germany, and the USA.

• Major shareholders include Invercap S.A. (43.31% ownership).

Financial highlights

• Consolidated EBITDA rose to $214M in 2Q24 from $127M in 2Q23, mainly due to mining.

• Revenue for H1 2024 was $1,120.1M, down from $1,581.6M in H1 2023.

• Net loss attributable to owners for H1 2024 was $350.5M, compared to a net loss of $166.9M in H1 2023.

• Cash and cash equivalents as of June 30, 2024 were $518M.

• Total assets as of June 30, 2024 were $6,591.4M, down from $7,006.5M at year-end 2023.

Outlook and guidance

• Focus on safe suspension of steel operations, employee transition, and developing non-steel businesses in Biobío.

• Continue green projects (e.g., Green Steel, REE Alloys) and finalize Cintac's turnaround.

• Advance Strategy 2030, including CMP expansion and environmental studies.

• The Board approved the indefinite suspension of steel activities, with an expected cash impact of $120–140M and an accounting impact of $320–350M in the next 12 months.

• The company continues to focus on cost reduction, operational efficiency, and strategic asset management.