• Annual Steel Shipments: 12.7 million tons.
• Cash from Operations: $1.8 billion.
• Adjusted EBITDA: $2.5 billion.
• Operating Income (2024): $1.9 billion.
• Net Income (2024): $1.5 billion, or $9.84 per diluted share.
• Liquidity: $2.2 billion.
• Return on Invested Capital: 23% over three years.
• Fourth Quarter Revenue: $3.9 billion.
• Fourth Quarter Net Income: $207 million, or $1.36 per diluted share.
• Fourth Quarter Adjusted EBITDA: $372 million.
• Fourth Quarter Operating Income: $238 million.
• Steel Operations Operating Income (Q4): $165 million.
• Steel Fabrication Operating Income (Q4): $142 million.
• Metals Recycling Operating Income (Q4): $23 million.
• Capital Investments (2024): $1.9 billion.
• Share Repurchase (2024): $1.2 billion, representing 6% of outstanding shares.

• Warning! GuruFocus has detected 7 Warning Sign with LYTS.

Release Date: January 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Steel Dynamics Inc (NASDAQ:STLD) achieved the second highest annual steel shipments of 12.7 million tons in 2024.
• The company reported cash from operations of $1.8 billion and adjusted EBITDA of $2.5 billion for the year.
• Steel Dynamics Inc (NASDAQ:STLD) celebrated its safest year ever, with record low injury and lost time rates.
• The Sinton facility improved significantly, operating above 80% capacity and expected to reach profitability soon.
• The company is on track with its aluminum operations, having cast its first aluminum ingot and expecting commercial shipments by June 2025.

Negative Points

• Fourth quarter 2024 net income was lower at $207 million, with adjusted EBITDA of $372 million, impacted by lower steel pricing and seasonal volume.
• Steel operations' operating income declined due to a $48 per ton decrease in average pricing and a 5% drop in shipments.
• An unplanned outage at the Butler flat roll division negatively impacted shipments by 50,000 tons.
• The company faced higher SG&A expenses in 2024 by approximately $88 million due to non-capitalizable expenses related to aluminum facilities.
• Sinton's profitability was delayed due to quality and yield issues, keeping costs elevated.

Q & A Highlights

Q: Have you witnessed any weather impact on your operations or demand dynamics so far this year? What type of volume increase should we expect in steel and fabrication in Q1? A: Barry Schneider, President and COO, mentioned that weather has tightened scrap availability but hasn't significantly impacted operations due to strong relationships with utilities and communities. Theresa Wagler, CFO, noted that while they expect seasonally higher volumes in Q1, the focus is on long-term growth in 2025, driven by public funding and reduced imports.

Q: Can you explain why the investigation into the hot-dip galvanized trade case was delayed? Have you seen an import bounce before potential tariffs? A: Mark Millett, CEO, explained that the delay is procedural due to the extensive data collection required. They have seen an import bump, but expect favorable rulings to reduce market noise. The cases are based on regular commerce, and they anticipate these imports to subside.

Q: Why isn't Sinton more profitable at 80% utilization, and what will it take to improve profitability? A: Barry Schneider highlighted that while Sinton's throughput has improved, extraordinary costs related to machine reliability and quality issues are impacting profitability. They are focused on improving yields and prime rates, with expectations for profitability in the second quarter. Mark Millett added that recent performance improvements are promising.

Q: Are there any new projects in the pipeline for 2025, and what is Steel Dynamics' appetite for acquiring new capacity? A: Mark Millett stated that while there are no imminent large-scale organic growth projects, the focus is on executing current projects like Sinton and Aluminum Dynamics. They continue to evaluate M&A opportunities but have nothing imminent.

Q: Can you clarify the expectations for the aluminum mill in terms of production? A: Mark Millett explained that they expect to end 2025 at a 50% utilization rate and reach 75% in 2026. The aluminum mill is expected to ramp up quickly due to its state-of-the-art technology and batch nature, unlike the continuous process at Sinton.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.