Radius posts quarterly loss in summer months

Portland, Oregon-based Radius Recycling Inc. has reported a net loss of $16 million in its 2024 fiscal year fourth quarter, which ran from June 1 to Aug. 31, while the company's summer 2024 results equated to a $13 loss per ferrous scrap ton processed.

Despite the lack of profits, Radius, which operates metal recycling and auto dismantling facilities and one electric arc furnace (EAF) steel mill, says its most recent results represent “a "significant improvement" compared with the third quarter, which included a material goodwill impairment charge. (The company’s 2024 fiscal year third quarter ran from March 1 to May 31.)

“The biggest drivers of the sequential performance improvement were significantly higher sales volumes for ferrous, nonferrous and finished steel products, stronger nonferrous market conditions and prices, an expansion in recycled metal spreads, and the ramp-up to the full quarterly run rate of benefits associated with the company’s $70 million annual cost reduction and productivity improvement program," Radius says.

The firm characterizes demand for nonferrous scrap as “strong” this summer, driving average net selling prices up 4 percent and sales volumes up 13 percent quarter on quarter.

Radius' ferrous scrap sales volumes increased 12 percent in the summer months compared with the spring, including from seasonally higher supply flows and benefits from timing of shipments.

The company portrays ferrous selling prices as “flat” during the summer months, saying they continued to reflect the dampening effect of continued elevated levels of Chinese steel exports and subdued manufacturing activity in the United States.

Finished steel sales volumes increased 11 percent compared with the prior quarter, driven primarily by seasonally stronger construction activity. The firm's Portland facility rolling mill utilization was 97 percent during its fourth quarter, compared with an 88 percent rate in the prior quarter.

“Our results this quarter benefited from our significant cost savings and productivity improvement program and our success in increasing ferrous, nonferrous and finished steel sales volumes,” Radius CEO Tamara Lundgren says.

“We expect the execution of our strategic initiatives, including investments in advanced metal recovery technologies, expansion of our recycling services platform, and productivity and cost controls to continue to positively contribute to our performance."

For the fiscal year that ran from Sept. 1, 2023, to Aug. 31, 2024, companywide revenue for Radius declined by 5 percent, from about $2.88 billion in fiscal year 2023 to nearly $2.74 billion in the fiscal year just completed.

However, the company’s net loss increased significantly in fiscal year 2024, rising more than 945 percent to some $266 million in the 12 months recently completed compared with the $25.4 million Radius lost in its 2023 fiscal year.

“Tight scrap availability has been our biggest headwind, and declines in U.S. interest rates should benefit consumer, manufacturing and construction activity which, in turn, should lead to improved scrap supply flows,” Lundgren says. “The structural demand for recycled metals remains strong, underpinned by the global transition to low carbon technologies and demand from the anticipated increase in infrastructure investment."

Radius has appointed Mauro Gregorio, the recently retired president of a Dow Inc. business unit, as a new independent director on its board of directors, effective Nov. 1.

During a 40-year career at Dow, Gregorio served in multiple roles, including leading the postacquisition integration of Dow Corning, overseeing the company’s feedstock and energy business unit, and serving as global vice president for the Hygiene and Medical Performance Plastics division.

Gregorio also had executive oversight over all Dow’s operations in Latin America, focusing on governance, talent development and investments.

“I am delighted to welcome Mauro to Radius’ board of directors,” Lundgren says. “Mauro is an accomplished business leader and experienced executive with extensive knowledge of global commodities markets and a keen understanding of performance optimization across the value chain. His expertise will be invaluable as we pursue our strategic growth goals and address the rising global demand for recycled metal products and services.”

His appointment will bring Radius’ board of directors to eight members.