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Aperam - Second quarter 2024 results: “Specialties transformation continues, a first step towards normalization in stainless”

Aperam S.A. / Key word(s): Quarter Results
Aperam - Second quarter 2024 results: “Specialties transformation continues, a first step towards normalization in stainless”

01-Aug-2024 / 06:59 CET/CEST

Second quarter 2024 results1

 

“Specialties transformation continues, a first step towards normalization in stainless”

 

Luxembourg, August 1, 2024 (07:00 CET) - Aperam S.A. (referred to as “Aperam” or the “Company”) (Amsterdam, Luxembourg, Paris, Brussels: APAM, NYRS: APEMY), announced today results for the three months ended June 30, 2024.
 

Highlights

  • Health and Safety: LTI frequency rate of 2.0x in Q2 2024 compared to 1.5x in Q1 2024
  • Shipments of 583 thousand tonnes in Q2 2024 remained broadly stable versus shipments of 585 thousand tonnes in Q1 2024
  • Adjusted EBITDA of EUR 86 million in Q2 2024, compared to Adjusted EBITDA of EUR 55 million in Q1 2024
  • Net income of EUR 59 million in Q2 2024, compared to net loss of EUR (19) million in Q1 2024
  • Basic earnings per share of EUR 0.82 in Q2 2024, compared to EUR (0.26) in Q1 2024
  • Free cash flow before dividends amounted to EUR 111 million in Q2 2024, compared to EUR (141) million in Q1 2024
  • Net financial debt of EUR 607 million as of June 30, 2024, compared to EUR 674 million as of March 31, 2024     

 

Strategic initiatives

  • Leadership Journey®2 Phase 5: Gains reached EUR 12 million in Q2 2024, the second quarter of the 2024 - 2026  program with target gains of EUR 200 million.

 

Prospects[1]a

  • Q3 2024 EBITDA is expected at a slightly higher level versus Q2 2024
  • We guide for higher Q3 2024 net financial debt

 

 

Timoteo Di Maulo, CEO of Aperam, commented:

 

“After 7 extremely challenging quarters, fading destocking finally brought some market improvement to European stainless.  Our Alloys and Distribution businesses continue to perform at high levels on pace to achieve the 2025 improvement target. The combination with the conclusion of Leadership Journey® Phase 4 investments for Europe and the cost reduction measures explains the rebound in results of Europe. We have taken the necessary restructuring actions in a  responsible and cooperative partnership with our workforce to adapt to a changing competitive environment. This keeps the Leadership Journey® Phase 5 on track, protects Aperam’s cost leadership position in Europe and secures employment as we leverage the significant investments in our footprint from the past three years.”

 

Financial Highlights (on the basis of financial information prepared under IFRS)

(in millions of Euros, unless otherwise stated)

Q2 24

Q1 24

Q2 23

H1 24

H1 23

Sales

1,634

1,657

1,702

3,291

3,578

Operating income / (loss)

19

(3)

54

16

135

Net income / (loss) attributable to equity holders of the parent

59

(19)

43

40

175

Basic earnings per share (EUR)

0.82

(0.26)

0.60

0.56

2.43

Diluted earnings per share (EUR)

0.82

(0.26)

0.59

0.56

2.41

 

 

 

 

 

 

Free cash flow before dividend

111

(141)

1

(30)

86

Net Financial Debt (at the end of the period)

607

674

461

607

461

 

 

 

 

 

 

Adj. EBITDA

86

55

103

141

230

Exceptional items

(8)

—

—

(8)

—

EBITDA

78

55

103

133

230

 

 

 

 

 

 

Adj. EBITDA/tonne (EUR)

148

94

187

121

202

EBITDA/tonne (EUR)

134

94

187

114

202

 

 

 

 

 

 

Shipments (000t)

583

585

550

1,168

1,141

 

Health & Safety results

 

Health and Safety performance based on Aperam personnel figures and contractors’ lost time injury frequency rate was 2.0x in the second quarter of 2024 compared to 1.5x in the first quarter of 2024.

 

Financial results analysis for the three-month period ending June 30, 2024

Sales for the second quarter of 2024 decreased by 1.4% at EUR 1,634 million compared to EUR 1,657 million for the first quarter of 2024. Shipments were broadly stable at 583 thousand tonnes in the second quarter of 2024 compared to 585 thousand tonnes in the first quarter of 2024, due to stable market conditions in Europe while the positive seasonality in Brazil was balanced by the delayed hot rolling mill ramp-up.

 

Adjusted EBITDA reached EUR 86 million during the second quarter (excluding an exceptional loss of EUR (8) million, related to a voluntary redundancy program) compared to EUR 55 million in the first quarter of 2024. Positive inventory valuation, a better product mix and Leadership Journey® related cost improvements more than compensated for a price/cost squeeze.

 

Depreciation and amortization expense was EUR (59) million for the second quarter of 2024, including an impairment loss of EUR (3) million.

 

Aperam had an operating income for the second quarter of 2024 of EUR 19 million compared to an operating loss of EUR (3) million for the previous quarter.

 

Financing costs, net, including the FX and derivatives result for the second quarter of 2024 were EUR (16) million. Cash cost of financing was EUR (15) million during the quarter.

 

Income tax benefit was EUR 57 million during the second quarter of 2024, thanks to the recognition of net deferred tax assets on tax losses carried forward for EUR 56 million.

The net result recorded by the Company was an income of EUR 59 million for the second quarter of 2024, compared to a loss of EUR (19) million for the first quarter of 2024.

Cash flows from operations for the second quarter of 2024 were EUR 136 million, including a working capital decrease of EUR 92 million. CAPEX for the second quarter was EUR (26) million.

 

Free cash flow before dividend for the second quarter of 2024 amounted to EUR 111 million, compared to EUR (141) million for the first quarter of 2024.

During the second quarter of 2024, cash returns to shareholders amounted to EUR 37 million (of which EUR 1 million paid to non-controlling interests), consisting fully of dividend.

 

Operating segment results analysis

 

Stainless & Electrical Steel (1)

 

(in millions of Euros, unless otherwise stated)

Q2 24

Q1 24

Q2 23

H1 24

H1 23

Sales

1,058

1,022

1,050

2,080

2,283

Adjusted EBITDA

59

6

52

65

132

Exceptional items

(8)

—

—

(8)

—

EBITDA

51

6

52

57

132

Depreciation & amortization

(28)

(27)

(26)

(55)

(51)

Operating income / (loss)

23

(21)

26

2

81

Steel shipments (000t)

Financial Performance Strategic Initiatives Debt Management Aperam S.A. Second Quarter 2024 Results
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