Radius Recycling, Inc. (NASDAQ:RDUS) shares are trading lower after it reported second-quarter (Q2) financial results for 2024.
Revenue stood at $621.06 million, beating the consensus of $626.15 million.
Gross margin declined to $40 million from $73 million a year ago, and adjusted EBITDA decreased to $3 million, compared to $32 million a year ago.
Ferrous sales volumes (LT, in thousands) decreased to 980 from 1,263 a year ago; adjusted EBITDA per ferrous ton sold ($/LT) was $3 compared to $25 in the prior-year quarter.
Avg. net ferrous sales prices ($/LT) rose to $384 from $367 in Q2 FY23. Finished steel average net sales price ($/ST) came in at $832 (vs. 943 a year ago), and sales volumes (ST, in thousands) of 114 (vs. 109 in the comparable period).
Finished steel sales volumes increased on the continued strength of non-residential and infrastructure demand in the Western U.S.
Adjusted loss per share: $1.04, beating the consensus of $1.09.
Radius implemented a plan to deliver $40 million in annual benefits by reducing selling, general, and administrative expenses by 10%.
Radius CEO Tamara Lundgren says “near-term market conditions for recycled metals are challenging” amid cyclical headwinds. The plan is to position Radius “to benefit from an improvement in market conditions and positive structural demand tailwinds.”  Â
“Scrap supply flows should benefit from a decline in U.S. interest rates and a recovery in global manufacturing activity. Additionally, the long-term structural demand for recycled metals remains positive, supported by the increased focus on decarbonization, the transition to low-carbon technologies, and the anticipated demand associated with the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, including Buy Clean provisions.”
Dividend: The board declared a cash dividend per share of $0.1875. It’s payable on May 6 to shareholders of record as of April 22, 2024.
Investors can gain exposure to the stock via two ETFs. They are VanEck Environmental Services ETF (NYSE:EVX) and SPDR S&P Metals & Mining ETF (NYSE:XME).
Price Action: RDUS shares are trading lower by 6.95% at $18.75 on the last check Thursday.
