Kardemir Karabük Demir Çelik Sanayi Ve Ticaret (KRDMD) Q1 2024 earnings summary

Executive summary

• Global crude steel production reached 469 million tons in 1Q24, up 0.5% year-over-year, with Turkey rising to 8th globally after a 28.4% production increase to 9.5 Mt in 1Q24 compared to 1Q23.

• The company is Turkey's only rail and railway wheel producer, with a diversified product portfolio including billet, bloom, profile, wire rod, and heavy profiles.

• Revenue for 1Q24 was 12.2 billion TRY, down from 16.0 billion TRY in 1Q23, reflecting a significant year-over-year decline.

• Net loss narrowed to 832 million TRY in 1Q24 from 1.74 billion TRY in 1Q23.

• Gross profit turned positive at 1.17 billion TRY, reversing a gross loss of 603 million TRY in 1Q23.

Financial highlights

• EBITDA for 1Q24 was 1.46 billion TRY, a significant turnaround from -291 million TRY in 1Q23; EBITDA margin improved to 11.94% from -1.82%.

• Gross profit margin rose to 9.6% in 1Q24 from -3.8% in 1Q23.

• Operating loss narrowed to 25 million TRY from 990 million TRY in 1Q23.

• Cash and cash equivalents at quarter-end were 5.27 billion TRY, down from 5.47 billion TRY at year-end 2023.

• Total borrowings decreased to 1.82 billion TRY from 2.54 billion TRY at year-end 2023.

Outlook and guidance

• Ongoing investments include vacuum degassing, a new continuous casting machine, environmental upgrades, and R&D projects.

• The company continues to operate as a going concern and is evaluating the impact of new Turkish Financial Reporting Standards effective from 2024.

• No explicit forward-looking financial guidance was provided.