Schnitzer Steel Industries, Inc.

Radius Recycling reported fiscal Q1 2025 adjusted EPS of a loss of $1.33. Management did not give a revenue figure in the call. Recycled metals contribution improved year over year, helped by stronger nonferrous demand and cost savings, while finished steel contribution declined on weaker domestic steel conditions and a scheduled outage. Steel mill utilization was 81%, down sequentially and above the U.S. average of 75%. Operating cash flow was near breakeven, net debt was $430 million, and the company invested $12 million in capex in the quarter. Looking ahead, management expects typical winter seasonality in fiscal Q2, a meaningful ramp in technology benefits, FY25 capex of about $60 million, and net proceeds of about $35 million from two property transactions in the second half.

Tamara Lundgren framed the quarter as resilient against a tough backdrop, emphasizing that the business held up despite a recessionary U.S. manufacturing environment, softer ferrous pricing, and weaker finished steel. She stressed that the company is focused on what it can control—productivity, customer service, technology, and platform diversification—while positioning for a recovery in manufacturing and demand for recycled metals. Her tone was constructive and patient, especially around a likely correction in Chinese excess steel exports and the longer-term secular demand drivers for recycled metals.

Stefano Gaggini said the company saw stable operating results year over year even as ferrous and finished steel markets deteriorated, and he highlighted an aggregate quarterly run rate of nearly $20 million from productivity and cost savings. He noted adjusted SG&A was down 6% year over year, while reported SG&A was 10% lower due to a $2 million insurance recovery gain; he also said several million dollars of elevated legal costs should ease in the second half. On capital and liquidity, he said Q1 operating cash flow was near breakeven, capex was $12 million, FY25 capex is expected to be around $60 million, net debt was $430 million, and two property transactions are expected to generate about $35 million in net proceeds in the second half. He also said the company does not expect to be a cash taxpayer in FY25 and should benefit from lower short-term rates.

The main analyst focus was the export ferrous market and whether Chinese overproduction and exports might ease. Management said Chinese steel overproduction has clearly pressured markets, but they expect a pullback as other countries resist cheap imports; they would not give timing, but said a correction is likely. A second question addressed rising interest expense: Stefano said the June credit-facility amendment costs are now fully in the run rate, Fed cuts should lower interest expense more fully in Q2, and leverage is being managed through aligned capex, expected asset-sale proceeds, and improving cash generation.