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RDUS Nasdaq· Radius Recycling Inc.
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RDUS Nasdaq· Radius Recycling Inc.
Earnings report Q4 2023

Radius Recycling Reports 12% Increase in Total Revenues in Q1 2024

Segments of revenue

In the first quarter of fiscal 2024, Radius Recycling reported total revenues of $673 million, representing a 12% increase compared to the prior year quarter. This growth was primarily driven by higher sales volumes in both ferrous and nonferrous segments. Ferrous sales volumes increased by 35% year-over-year, while nonferrous sales volumes increased by 12%. The acquisition of the ScrapSource business also contributed to the increase in sales volumes.

Strengths

Radius Recycling's strong performance in the first quarter of fiscal 2024 can be attributed to higher sales volumes in the ferrous and nonferrous segments. The resolution of disruptions related to an extended shredder outage and a regulatory issue in the prior year quarter also contributed to the increase in sales volumes. Additionally, the company's management highlighted the positive impact of higher ferrous average net selling prices.

Challenges

Despite the increase in total revenues, Radius Recycling faced challenges in maintaining gross margin. The persistently tight supply conditions for scrap metal, including end of life vehicles, in the domestic markets during the first quarter of fiscal 2024 led to higher purchase prices for unprocessed scrap metal. This resulted in lower metal spreads for recycled metal and finished steel products, impacting the company's gross margin.

Noteworthy

It is noteworthy that Radius Recycling reported a net loss of $18 million in both the first quarters of fiscal 2024 and 2023. Adjusted EBITDA also decreased significantly from $8 million in the prior year quarter to $1 million in the first quarter of fiscal 2024. These figures indicate a challenging operating environment for the company.

Summary

Radius Recycling demonstrated a strong performance in the first quarter of fiscal 2024, with a 12% increase in total revenues driven by higher sales volumes in the ferrous and nonferrous segments. However, the company faced challenges in maintaining gross margin due to tight supply conditions for scrap metal. The net loss and decrease in adjusted EBITDA highlight the difficult operating environment. Overall, while the increase in revenue is positive, the company needs to address the challenges in gross margin to improve profitability.

Source documents

Form 10-Q  filed on Jan 04, 2024
183 pages scanned

Reference data

Company financials Q4 revenue 621M
Analyst estimates Q4 EPS beat by 47.52%
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