Steel Dynamics(US:STLD)2024-08-08 17:22Financial Performance - In Q2 2024, Steel Dynamics achieved steel shipments of 3.2 million tons, with a solid demand compared to Q2 2023[62]. - Consolidated operating income decreased by $504.6 million, or 47%, to $559.1 million in Q2 2024, attributed to a contraction in metal spread across all platforms[63]. - Net income attributable to Steel Dynamics decreased by $384.1 million, or 47%, to $428.0 million in Q2 2024, consistent with the decline in operating income[63]. - For the first half of 2024, consolidated operating income decreased by $589.0 million, or 31%, to $1.3 billion compared to the same period in 2023[64]. Sales and Shipments - Steel Operations Segment net sales in Q2 2024 decreased by 10% to $3.25 billion, driven by lower average selling prices and shipments[70]. - The average selling price for the steel segment decreased by 9%, or $111 per ton, in Q2 2024 compared to Q2 2023[70]. - Total ferrous metal external shipments for Q2 2024 were 591,120 gross tons, a 2% increase from 577,979 gross tons in Q2 2023[76]. - Nonferrous metal external shipments increased by 4% to 254,353 thousand pounds in Q2 2024 compared to 244,360 thousand pounds in Q2 2023[76]. Operating Income - Operating income for the steel operations decreased by 37% to $438.6 million in Q2 2024, reflecting metal spread compression[71]. - Operating income for metals recycling operations decreased by 14% to $28.2 million in Q2 2024, down from $32.8 million in Q2 2023[76]. - Steel fabrication operations net sales decreased by 39% in Q2 2024, with average selling prices dropping by $1,406 per ton, or 32%[80]. - Operating income for steel fabrication operations fell by 61% to $180.7 million in Q2 2024, compared to $462.1 million in Q2 2023[81]. Expenses and Liquidity - Selling, general and administrative expenses increased by 13% to $160.0 million in Q2 2024, representing 3.5% of net sales[85]. - Interest expense decreased by 43% to $24.7 million in the first half of 2024, down from $43.3 million in the same period in 2023[92]. - Total liquidity as of June 30, 2024, was $2.67 billion, including cash and equivalents of $829.98 million[96]. Capital Investments and Shareholder Returns - Capital investments in the first half of 2024 amounted to $793.5 million, up from $584.6 million in the same period in 2023[102]. - Quarterly cash dividend increased by 8% to $0.46 per share in Q1 2024, resulting in declared cash dividends of $144.2 million in the first half of 2024[103]. - The board of directors authorized a share repurchase program of up to $1.5 billion, with $607.1 million and $734.2 million repurchased in the first half of 2024 and 2023, respectively[104]. - As of June 30, 2024, there is $793.2 million remaining available for purchase under the November 2023 share repurchase program[104]. Risk Management - The company believes cash flows from operations and other available funds will be adequate for the next twelve months to meet debt service obligations and capital expenditures[105]. - The company is exposed to market risks related to price fluctuations of raw materials, including metallic raw materials, electricity, and natural gas[106]. - Commitments with suppliers for raw materials include "take or pay" provisions for specified quantities, with some extending up to 28 years for water products[107]. - Fixed price contracts for nonferrous and ferrous metals are in place, with substantial completion expected within the next twelve months[108]. - The risk strategy aims to protect profit margins through base metal financial contracts[108].