Eregli Demir ve Çelik Fabrikalari (EREGL) Q2 2024 earnings summary

Executive summary

• Achieved $3.2 billion in revenue, $441 million EBITDA, and $316 million net profit in H1 2024, with sales and production rebounding after earthquake disruptions.

• EBITDA margin reached 13.9% and net profit margin 10.0% in H1 2024.

• Crude steel production increased by 41% year-over-year to 4.44 million tonnes, with capacity utilization rebounding to 93–94%.

• Export share recovered to 19% of sales, with 81% of revenue from domestic sales.

• Share buyback program increased company-held shares to 3.97% after repurchasing 14.82 million shares.

Financial highlights

• EBITDA per ton was $113–$117 in H1 2024; full-year guidance is $90–$100 per ton.

• Net debt stood at $1.9 billion at H1 end, with a net debt/EBITDA ratio of 2.2x.

• $545 million spent on capital expenditures in H1, including advances; total investment expenditures for H1 2024 were $421 million.

• Additional insurance income of $105 million was received but excluded from EBITDA.

• Free cash flow for 6M 2024 was negative at $(21) million.

Outlook and guidance

• Sales expected to exceed 8 million tons in 2024.

• EBITDA per ton forecasted at $90–$100 for 2024, reflecting global margin contraction.

• CapEx expected to reach $1 billion in 2024, with major projects including a new blast furnace and coke battery.

• Net zero roadmap announced, targeting 25% carbon reduction by 2030, 40% by 2040, and net zero by 2050, with $3.2 billion in green investments planned by 2030.

• Dividend policy aims to distribute all distributable profit in cash, subject to leverage and investment needs.