Tree Island Steel Announces Second Quarter 2024 Results
In This Article:
VANCOUVER, British Columbia, Aug. 01, 2024 (GLOBE NEWSWIRE) -- Tree Island Steel (''Tree Island'' or the ''Company'') (TSX: TSL) announced today its financial results for the three months ended June 30, 2024.
For the three-month period ended June 30, 2024, revenues, net of freight and distribution costs, decreased by $9.6 million to $54.0 million, compared to $63.6 million in 2023. Gross profit for the quarter decreased to $4.6 million, from $9.1 million in the same period in 2023. Adjusted EBITDA amounted to $2.9 million, compared to $6.8 million during the same period in 2023. The largest drivers for the decreased earnings are the lower average selling prices and reduced spread over raw material costs. To a lesser extent, the shutdown of Etiwanda facility last year also impacted the volumes and revenue.
For the six months ended June 30, 2024, revenues, net of freight and distribution costs, decreased by $28.4 million to $110.5 million compared to $138.9 million in 2023 and gross profit decreased to $9.4 million from $20.9 million. The decrease is for the same factors as in the quarter. This resulted in an Adjusted EBITDA of $6.0 million, compared to $16.6 million during the same period in 2023.
“The first half of the year was challenged with customers conservatively managing their inventories and selling prices trending lower, resulting in further compression in our gross profit margins. We expect these headwinds to continue into the second half of the year. The Company is continuing to address operational challenges that have the potential to impact its future operating results and cashflows, including the ongoing trade cases in Canada and the US and increasing environmental and regulatory compliance requirements. As noted last quarter, these market conditions require careful management to maintain the Company’s operating results,” commented Nancy Davies, Chief Operating Officer of Tree Island Steel.
| RESULTS FROM OPERATIONS | |||||||||
|
| Three Months Ended |
| Six Months Ended | ||||||
| ($'000 unless otherwise stated) | June 30, |
| June 30, | ||||||
|
| 2024 |
| 2023 |
|
| 2024 |
| 2023 |
|
| Revenue | 57,718 |
| 67,263 |
|
| 118,308 |
| 147,011 |
|
| Freight and distribution costs | (3,732 | ) | (3,672 | ) |
| (7,769 | ) | (8,150 | ) |
| Subtotal | 53,986 |
| 63,591 |
|
| 110,539 |
| 138,861 |
|
| Cost of sales | (48,013 | ) | (53,304 | ) |
| (98,421 | ) | (115,461 | ) |
| Depreciation | (1,365 | ) | (1,205 | ) |
| (2,682 | ) | (2,534 | ) |
| Gross profit | 4,608 |
| 9,082 |
|
| 9,436 |
| 20,866 |
|
| Selling, general and administrative expenses | (3,288 | ) | (3,352 | ) |
| (6,679 | ) | (6,836 | ) |
| Operating income | 1,320 |
| 5,730 |
|
| 2,757 |
| 14,030 |
|
| Foreign exchange gain (loss) | 202 |
| (125 | ) |
| 584 |
| 18 |
|
| Loss on disposition of property, plant and equipment disposal | ‐ |
| (31 | ) |
| ‐ |
| (97 | ) |
| Site closure costs | ‐ |
| (1,040 | ) |
| ‐ |
| (1,340 | ) |
| Reorganization costs | (11 | ) | (2097 | ) |
| (11 | ) | (2,097 | ) |
| Interest Income | 128 |
| 253 |
|
| 335 |
| 390 |
|
| Financing Expenses | (568 | ) | (371 | ) |
| (1,128 | ) | (807 | ) |
| Income before income taxes | 1,071 |
| 2,319 |
|
| 2,537 |
| 10,097 |
|
| Income tax expense | (461 | ) | (668 | ) |
| (1,301 | ) | (2,596 | ) |
| Net income | 610 |
| 1,651 |
|
| 1,236 |
| 7,501 |
|
| Net income per share | 0.02 |
| 0.06 |
|
| 0.05 |
| 0.27 |
|
| Dividends per share | 0.03 |
| 0.05 |
|
| 0.06 |
| 0.10 |
|
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|
| June 30, |
|
|
|
| December 31, |
| |
| Financial position as at: |
| 2024 |
|
|
| 2023 |
| ||
| Total assets |
| 173,583 |
|
|
| 174,260 |
| ||
| Total non‐current financial liabilities |
| 30,312 |
|
|
| 28,439 |
| ||
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|
|
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| Adjusted EBITDA |
|
|
|
|
| ||||
|
| Three Months Ended |
| Six Months Ended | ||||||
| ($'000 unless otherwise stated) | June 30, |
| June 30, | ||||||
|
| 2024 |
| 2023 |
|
| 2024 |
| 2023 |
|
| Operating income 5,730 | 1,320 |
| 5,730 |
|
| 2,757 |
| 14,030 |
|
| Add back depreciation | 1,365 |
| 1,205 |
|
| 2,682 |
| 2,534 |
|
| Foreign exchange (loss) gain | 202 |
| (125 | ) |
| 584 |
| 18 |
|
| Adjusted EBITDA1 | 2,887 |
| 6,810 |
|
| 6,023 |
| 16,582 |
|
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1 See definition on Adjusted EBITDA in Section 2 NON‐IFRS MEASURES of the June 30, 2024, MD&A.