CMC expects a $35-40 million annual CO2 credit gain to boost its Polish mill’s Ebitda on-quarter in the first fiscal quarter through November, while underlying financial performance will remain similar, Kallanish notes.
Although Polish demand has improved and regional mills shown supply discipline, this has been offset by increased import flows from neighbouring countries, the steelmaker notes.
CMC Poland’s deliveries fell 18% on-year in the August quarter, the final quarter of CMC’s 2024 fiscal year, to 319,000 short tons, dragged down by a 35% drop in rebar sales to 98,000st. Market conditions were consistent with the previous quarter and remained challenging, the firm notes.
Average selling price inched down 2% to $667/st, while cost of scrap utilised dropped 4% to $383/st. Metal margin was flat at $284/st.
Net sales fell 19% to $222.1 million but adjusted Ebitda loss narrowed 88% to $3.6m. The latter was driven entirely by cost management actions, which overcame the drop in shipment volumes with no change in margins over scrap, CMC points out.
Long steel consumption remained substantially below historical levels.
Green shoots are however emerging in the European market, CMC says in its earnings presentation. The residential construction market is recovering; new housing permits and the number of units under construction have rebounded strongly. Demand should be supported by the expected release of €65 billion to Poland from the EU Recovery and Resilience Facility.
In the fiscal year through August 2024, CMC Poland’s shipments slumped 29% on-year to 1.23 million st, with rebar almost halving to 364,000st and merchant bar and other products down 17% to 870,000st. Net sales fell 36% to $848.6m and adjusted Ebitda declined 54% to $22.5m.
Adam Smith Poland
