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 rebounding to 92%–93%.

• Exports accounted for 20% of sales, returning to pre-earthquake levels.

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

• Sales target for 2024 is approximately 8 million tons, with a stronger Q4 expected.

Financial highlights

• EBITDA per ton averaged $99 in 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 at end of September was $2.1 billion; net debt/EBITDA ratio at 2.8x, expected to reach ~3x by year-end.

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

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

Outlook and guidance

• Expect 8 million tons of sales for 2024, with Q4 typically stronger.

• EBITDA per ton for the year expected to be $80–$90, down from $99 in the first nine months.

• Net debt/EBITDA expected to decrease below 2.5x in 2025 as CapEx moderates and market conditions improve.

• CapEx for 2025 projected at $800–$850 million as major investments conclude.

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