Eregli Demir ve Çelik Fabrikalari (EREGL) Q4 2024 earnings summary

Executive summary

• Achieved $6.2 billion in revenue, $646 million EBITDA, and $411 million net profit for 2024, with high capacity utilization and strong export performance despite challenging market conditions.

• Crude steel production reached 8.7 million tons with a capacity utilization ratio of 89%, above global and national averages.

• Export volume was 1.5 million tons, representing a 19% share of total sales, the second highest in company history.

• Total production and sales were 8.1 million tons, with flat steel and long product sales both increasing year-over-year.

• Net profit margin improved to 7.0% in 2024, with strong compliance to governance and sustainability principles.

Financial highlights

• EBITDA per ton was $83 in 2024, with guidance for $90-$100 per ton in 2025 due to cost reductions and efficiency gains.

• Net working capital decreased in Q4 2024 due to lower inventories and VAT receivables.

• Net debt at end-2023 was $2.1 billion, with a net debt/EBITDA ratio of 2.8x; target is to keep this below 3.3x in 2025.

• Capital expenditures totaled $723 million in 2024, with $1.1 billion spent including advances; CapEx to decrease in 2025 and beyond.

• Depreciation was $263 million and net interest expense $177 million in 2024.

Outlook and guidance

• Sales volume target for 2025 is approximately 8.1 million tons, similar to 2024.

• EBITDA per ton expected to improve in 2025, driven by cost reductions from new investments and energy efficiency.

• CapEx expected at $800-$850 million in 2025, with annual CapEx beyond 2025 projected at $600-$650 million.

• Net Zero Roadmap investment of $3.2 billion by 2030, with 78% externally financed, aiming for 13 million tons crude steel capacity.

• Targets a 25% reduction in greenhouse gas emissions by 2030, 40% by 2040, and net zero by 2050.