Radius Recycling Inc (RDUS) 2025 Q1 法說會逐字稿

Good day. And thank you for standing by. Welcome to the Radius Recycling first quarter 2025 earnings release call and webcast. (Operator Instructions). Please be advised that today's conference is being recorded. And I like to hand the conference over to your first speaker today, Michael Bennett, investor relations. Please go ahead.

再會。感謝您的支持。歡迎參加 Radius Recycling 2025 年第一季財報發布電話會議和網路廣播。（操作員指令）。請注意，今天的會議正在錄音。我想將會議交給今天的第一位發言人，投資者關係部的邁克爾貝內特 (Michael Bennett)。請繼續。

Thank you, Marvin and good morning. I'm Michael Bennett, the company's Vice President of Investor relations. I'm happy to welcome you to Radius Recycling's earnings presentation for the first quarter of fiscal 2025. In addition to today's audio comments, we have issued our press release and posted a set of slides, both of which you can access on our website at radiusrecycling.com.

謝謝你，馬文，早安。我是麥可‧貝內特 (Michael Bennett)，公司投資人關係副總裁。我很高興歡迎您參加 Radius Recycling 2025 財年第一季的財報。除了今天的音訊評論外，我們還發布了新聞稿並發布了一組幻燈片，您可以在我們的網站 radiusrecycling.com 上訪問它們。

Before we start, let me call your attention to the detailed Safe Harbor statement on slide 2, which is also included in our press release and in the company's form 10-Q which will be filed later today. As we note on slide 2, we may make forward-looking statements on our call today. Our actual results may differ materially from those projected in our forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statement is contained in slide 2 as well as our press release of today and our form 10-Q.

在我們開始之前，請允許我提請您注意幻燈片 2 上的詳細安全港聲明，該聲明也包含在我們的新聞稿和將於今天晚些時候提交的公司 10-Q 表中。正如我們在第 2 張投影片中所提到的，我們可能會在今天的電話會議上做出前瞻性的陳述。我們的實際結果可能與前瞻性陳述中預測的結果有重大差異。有關可能導致實際結果與前瞻性聲明中的結果大不相同的因素的更多信息，請參閱幻燈片 2 以及我們今天的新聞稿和 10-Q 表格。

Please note that we will be discussing some non-GAAP measures during our presentation today. We've included a reconciliation of those metrics to GAAP in the appendix to our slide presentation.

請注意，我們將在今天的演示中討論一些非公認會計準則指標。我們在投影片簡報的附錄中列出了這些指標與 GAAP 的對照組。

Now let me turn the call over to Tamara Lundgren, our Chairman and Chief Executive Officer. She will host the call today with Stefano Gaggini, our Chief Financial Officer.

現在，讓我將電話轉給我們的董事長兼執行長 Tamara Lundgren。她今天將與我們的財務長 Stefano Gaggini 一起主持電話會議。

Thank you, Michael. Good morning, everyone and welcome to our fiscal '25 first quarter earnings call. On our call this morning, I'll review our quarterly results, the trends affecting our business, and progress on the strategic activities we have underway to address industry dynamics and create long term value through the cycle.

謝謝你，麥可。大家早安，歡迎參加我們的 25 財年第一季財報電話會議。在今天早上的電話會議上，我將回顧我們的季度業績、影響我們業務的趨勢，以及我們正在進行的策略活動的進展，以應對行業動態並在整個週期中創造長期價值。

Stefano will then provide more detail on our financial performance, our capital investments, and our capital structure. I'll wrap up with some takeaways from our sustainability report that we issued in mid-December and then we'll take your questions.

然後，Stefano 將提供有關我們的財務業績、資本投資和資本結構的更多詳細資訊。我將總結我們在 12 月中旬發布的可持續發展報告的一些要點，然後我們將回答您的問題。

But before we begin, I'd like to take a moment to express our support for those of you who are being impacted or who have family or friends who are being impacted by the wildfires in Southern California. Our thoughts and prayers are with you.

但在開始之前，我想花點時間表達我們對那些受到南加州野火影響或家人或朋友受到影響的人們的支持。我們的思念和祈禱與你們同在。

Before turning to the next slide, I'd also like to take a moment to recognize our employees for their continued strong safety performance. After delivering safety results in fiscal '24 that were the second best in our company's history, this quarter the team achieved almost a 50% sequential reduction in our total case incident rate and 97% of our sites experienced zero lost time injuries. These strong results reflect our team's engagement and commitment to creating a safe work environment and a sustainable safety culture.

在翻到下一張投影片之前，我還想花點時間表揚一下我們的員工持續出色的安全表現。在 24 財年取得公司史上第二好的安全成績後，本季團隊的總事故率連續降低了近 50%，且 97% 的站點沒有發生工時損失傷害。這些強勁的業績反映了我們團隊對創造安全工作環境和永續安全文化的參與和承諾。

Let's turn now to slide 4 to review our first quarter highlights. While market conditions during the quarter were more challenging than a year ago, our year-over-year operating results remained stable. The difference between our adjusted EPS loss of $1.33 compared to a year ago was primarily due to an income tax detriment associated with our deferred tax assets.

現在讓我們翻到投影片 4 來回顧第一季的亮點。儘管本季的市場條件比去年同期更具挑戰性，但我們的年比經營業績仍保持穩定。我們的調整後每股收益虧損 1.33 美元與一年前相比有所差異，這主要是由於與我們的遞延稅務資產相關的所得稅損失造成的。

The contribution from our recycled metals business improved versus a year ago, driven by benefits realized from our cost reduction and productivity measures implemented in fiscal '24 and stronger non-ferrous demand which offset the tight scrap environment and the softer global ferrous markets.

我們的再生金屬業務的貢獻較上年同期有所提高，這得益於我們在 24 財年實施的成本削減和生產率提高措施所帶來的收益，以及有色金屬需求的增強，抵消了廢料緊俏的環境和全球黑色金屬市場疲軟的影響。

The contribution from finished steel declined year over year due to weaker domestic steel conditions and a scheduled maintenance outage. Our steel mill utilization of 81%, while down sequentially, was still higher than the US average of 75% reflecting relatively stronger West Coast demand. We achieved nearly break-even operating cash flow during the quarter and returned capital to our shareholders through our 123rd consecutive quarterly dividend.

由於國內鋼鐵市場行情疲軟以及計畫內停產維護，成品鋼的貢獻較去年同期下降。我們的鋼廠利用率為 81%，雖然環比下降，但仍高於美國 75% 的平均水平，反映出西海岸需求相對強勁。我們在本季度實現了幾乎收支平衡的經營現金流，並透過連續第 123 個季度的股息向股東返還資本。

The biggest headwind to our performance is the pressured US manufacturing sector which has been in recessionary territory for two years. The last time we saw such an extended manufacturing downturn was over 20 years ago.

我們業績面臨的最大阻力是美國製造業，該產業已陷入衰退兩年之久，承受巨大壓力。我們上次看到如此長時間的製造業衰退還是在20多年前。

The outlook for a manufacturing recovery, however, is positive with US consumer and business confidence surging since November and a consensus across the political spectrum that revitalizing our manufacturing sector is critical for US economic growth and national security. A recovery in the manufacturing sector should both ease the constrained scrap environment and drive more demand for ferrous and non-ferrous recycled metals.

然而，製造業復甦的前景是樂觀的，因為美國消費者和企業信心自 11 月以來飆升，各政治派別都一致認為，振興製造業對美國經濟成長和國家安全至關重要。製造業的復甦既可以緩解廢棄物環境的緊張，又可以推動對黑色和有色再生金屬的更多需求。

From a long-term perspective, the demand for recycled metals continues to have a strong upward bias, underpinned by several structural trends. US industrial reshoring continued growth in EAF steelmaking production, maximizing the use of recycled materials in production processes, and the transition to metal intensive low carbon technologies. Importantly, our strategic initiatives focused on metal recovery technologies, volume growth, and expansion of our 3PR services are strongly aligned with these secular growth drivers.

從長期來看，再生金屬的需求持續呈現強勁上升趨勢，這受到多種結構性趨勢的支撐。美國工業回流持續推動電弧爐煉鋼生產的成長，在生產過程中最大限度地利用再生材料，並向金屬密集型低碳技術轉型。重要的是，我們的策略性舉措專注於金屬回收技術、產量成長以及第三方資源服務擴展，與這些長期成長動力緊密結合。

So let's turn to slide 5 for a deeper dive into market conditions. During the quarter, export prices for recycled ferrous metals decreased driven by softer global steel demand including the dampening effect from elevated levels of Chinese steel exports.

讓我們翻到第 5 張投影片來深入了解市場狀況。本季度，受全球鋼鐵需求疲軟（包括中國鋼鐵出口量增加的抑製作用）的影響，再生黑色金屬出口價格下跌。

In the last 12 months through November 2024 Chinese steel exports to countries in Asia, Central and South America, and Turkey have risen by approximately 25% versus a year ago, reducing steel manufacturing and associated ferrous scrap demand in these regions as a result. Domestic ferrous scrap prices during Q1 were relatively flat sequentially but down significantly from a year ago. Finished steel prices also softened during the quarter as purchasers reduced inventory levels heading into the end of the year.

截至 2024 年 11 月的 12 個月內，中國對亞洲、中美洲、南美洲和土耳其國家的鋼鐵出口量年增了約 25%，從而減少了這些地區的鋼鐵製造和相關廢鋼需求。第一季國內廢鋼價格季減持平，但年比去年大幅下降。由於購買者在年底前減少庫存水平，本季成品鋼價格也有所走軟。

While the construction markets were softer due to interest rate uncertainty and inflationary pressures on construction costs, the Dodge Momentum Index which is a 12-month leading indicator of non-residential construction spending is signaling strong growth.

儘管由於利率不確定性和建築成本通膨壓力導致建築市場疲軟，但作為非住宅建築支出 12 個月領先指標的道奇動量指數卻顯示出強勁增長。

Moving to non-ferrous, although average non-ferrous prices decreased sequentially, they remain up year-over- year on healthy global demand for copper and aluminum. One of the most significant drivers of change to our operating margins has been the reduced supply of recycled scrap metal. As the US manufacturing sector has gone through a cyclical downturn, our markets have experienced a tightening in the availability of end-of-life vehicles, obsolete white goods, manufacturing scrap, and scrap from fewer construction and demolition projects. These constrained supply conditions have pressured purchase costs for raw materials, leading to margin compression.

至於有色金屬，儘管有色金屬平均價格較上季下降，但由於全球對銅和鋁的需求旺盛，平均價格仍較去年同期上漲。影響我們營業利潤率變化的最重要因素之一是回收廢金屬供應的減少。隨著美國製造業經歷週期性衰退，我們的市場上報廢汽車、過時的白色家電、製造廢料以及較少的建築和拆除項目廢料的供應都趨於緊縮。這些受限的供應條件對原材料的採購成本帶來了壓力，導致利潤率下降。

In addition, auto production that is still below pre-pandemic levels, together with financing costs for new and used cars that are still comparatively high have contributed to the average age of vehicles on the road reaching their highest level on record.

此外，汽車產量仍低於疫情前的水平，加上新車和二手車的融資成本仍然較高，導致道路上行駛的車輛平均使用年限達到歷史最高水平。

But while the weaker environment that we're in today presents challenges, we've experienced cyclical downturns and volatility before and we've demonstrated our ability to navigate effectively through these periods by focusing on what we can control including productivity, customer service, technology, and platform diversification.

然而，儘管我們今天所處的較弱環境帶來了挑戰，但我們以前也經歷過週期性的衰退和波動，並且我們已經證明，我們有能力透過專注於我們能夠控制的領域（包括生產力、客戶服務、技術和平台多樣化）來有效度過這些時期。

As market conditions recover, we are very well positioned to benefit from the expected increased demand for recycled metals associated with investments in infrastructure, industrial reshoring, growth in US electric arc furnace steelmaking capacity, and the transition to metal intensive low carbon technologies.

隨著市場狀況的復甦，我們將非常有利地受益於基礎設施投資、工業回流、美國電弧爐煉鋼能力的增長以及向金屬密集型低碳技術的轉型所帶來的再生金屬需求的預期增長。

So let's turn now to slide 6 for an update on our strategic priorities. Our strategic initiatives are strongly aligned with the secular growth trends I mentioned earlier and can be summarized as follows: First, our investments in advanced metal recovery technologies. This is a multi-site, multi-year investment program, focused on increasing the recovery of non-ferrous metals from our shredding process and creating product optionality by enabling us to create furnace-ready products based on demand and price. The majority of the returns from these investments should come through our results in fiscal '25. We estimate these investments should return over $40 million in annual EBITA after full deployment.

現在讓我們翻到第 6 張投影片來了解我們的策略重點的最新情況。我們的策略舉措與我之前提到的長期成長趨勢高度一致，可以概括如下：首先，我們對先進金屬回收技術的投資。這是一項多地點、多年的投資計劃，重點是提高從粉碎過程中回收有色金屬的能力，並使我們能夠根據需求和價格生產出可用於熔爐的產品，從而提供產品的可選性。這些投資的大部分回報應該會透過我們 25 財年的業績來實現。我們估計，這些投資全面部署後每年可帶來超過 4,000 萬美元的 EBITA 回報。

Second, our trademark 3PR services and solutions business line. Our 3PR service offering enables our customers to increase their recycling rates, reduce material going to landfills, lower their carbon footprint, and provide enhanced sustainability reporting. This is an asset-light business typically with multi-year contracts that provides a counterbalance to our more cyclical core recycling operations and it's highly aligned with secular growth trends. Reflecting this steady growth, our 3PR business line contributed over 10% to our recycled metals volumes in fiscal '24.

第二，我們的商標3PR服務和解決方案業務線。我們的 3PR 服務使我們的客戶能夠提高他們的回收率、減少進入垃圾掩埋場的材料、降低他們的碳足跡並提供增強的永續性報告。這是一項輕資產業務，通常簽訂多年期合約，可以平衡我們更具週期性的核心回收業務，並且與長期成長趨勢高度一致。反映出這種穩定的成長，我們的 3PR 業務線在 24 財年為我們再生金屬產量貢獻了 10% 以上。

Third, our cost reduction and productivity program. In the first quarter, we achieved a 6% reduction in adjusted SG&A costs compared to the prior year, reflecting the cost savings initiatives we implemented during fiscal '24. Additionally, as part of our continued focus on optimizing production efficiencies, we expect in fiscal '25 to benefit from the monetization of certain discrete real estate assets in locations where we can both substantially consolidate or reposition our business activity and unlock the associated real estate value. We expect to close on two transactions in the second half of the year and raise net proceeds of approximately $35 million. Benefits from these initiatives are already contributing to our financial performance and as the manufacturing sector improves and the global steel market returns to equilibrium, we expect the benefits of our actions to become much more visible in our margins and EBITDA and to provide a substantial boost to future financial results.

第三，我們的成本削減和生產力計劃。第一季度，我們的調整後銷售、一般及行政費用與前一年相比降低了 6%，這反映了我們在 24 財年實施的成本節約措施。此外，作為我們持續專注於優化生產效率的一部分，我們預計在 25 財年，我們將受益於某些獨立房地產資產的貨幣化，在這些地方，我們既可以大幅整合或重新定位我們的業務活動，又可以釋放相關的房地產價值。我們預計下半年將完成兩筆交易，並籌集約 3,500 萬美元的淨收益。這些舉措帶來的好處已經對我們的財務業績做出了貢獻，隨著製造業的改善和全球鋼鐵市場恢復平衡，我們預計這些舉措帶來的好處將在我們的利潤率和 EBITDA 中更加明顯，並為未來的財務業績提供實質性的推動。

So now let me turn the presentation over to Stefano.

現在，讓我將演講交給 Stefano。

Thank you. Tamara and good morning. On a year-over-year basis, we were able to achieve stable operating results, despite a deterioration in market conditions for ferrous and especially for finished steel over the last 12 months. In addition, last year's results had benefited from insurance recovery gains of $4 million.

謝謝。塔瑪拉，早安。與去年同期相比，儘管過去 12 個月黑色金屬市場（尤其是成品鋼市場）狀況惡化，我們仍然取得了穩定的營運表現。此外，去年的業績也受惠於 400 萬美元的保險賠償收益。

The contribution to consolidated results from our recycled metals platform improved over this period, driven primarily by stronger non-ferrous demand and by the productivity and cost savings program we implemented over the last year with an aggregate quarterly run rate of benefits of nearly $20 million. This more than offset the impact of the softer global ferrous markets.

在此期間，我們的再生金屬平台對綜合業績的貢獻有所提高，主要原因是有色金屬需求增強，以及我們去年實施的生產力和成本節約計劃，季度總收益接近 2000 萬美元。這足以抵銷全球黑色金屬市場疲軟帶來的影響。

Finished steel contribution was significantly lower as weaker demand and prices led to a 10% compression in metal spreads year over year which was further compounded by higher conversion costs due to lower mill utilization in the first quarter of fiscal '25 including from a scheduled maintenance outage. On a sequential basis, there were two primary drivers of the decline in adjusted EBITDA performance.

由於需求和價格疲軟導致金屬價差比去年同期壓縮 10%，成品鋼的貢獻顯著降低，而由於 2025 財年第一季工廠利用率下降（包括計畫內維護停機），導致加工成本上升，進一步加劇了這一情況。從環比來看，調整後 EBITDA 業績下滑主要有兩個原因。

First, slightly more than half of the reduction in EBITDA was associated with the decline in sales volumes primarily due to seasonality and to a lesser extent timing of shipments. Ferrous and finished steel volumes each were down 11% and non-ferrous volumes were down 14%. Lower volumes also contributed to margin compression through the loss of operating leverage including at our mill due to the lower utilization.

首先，EBITDA 的減少有一半多一點與銷售量的下降有關，這主要是由於季節性因素，其次是出貨時間。黑色金屬和成品鋼產量分別下降11%，有色金屬產量下降14%。由於利用率較低，包括我們工廠在內的產量下降導致經營槓桿損失，也導致了利潤率的壓縮。

And second, there was a reduction in average net selling prices for our ferrous, non-ferrous, and finished steel products that led to metal spread compression compared to the fourth quarter. The spread compression also included a detriment from volatility in non-ferrous prices during the quarter. Adjusted SG&A expense was down 6% year-over-year driven by the measures we implemented during fiscal '24 targeting a reduction of 10% in SG&A.

其次，我們的黑色金屬、有色金屬和成品鋼產品的平均淨售價下降，導致金屬價差與第四季相比有所壓縮。價差壓縮還包括本季有色金屬價格波動造成的損害。調整後的銷售、一般及行政費用年減 6%，這得益於我們在 24 財年實施的措施，目標是將銷售、一般及行政費用降低 10%。

It is worth highlighting that our results in the first quarter reflect elevated costs of several million dollars for certain ongoing legal matters, which we expect to be temporary and recede in the second half of fiscal '25. Our reported SG&A expense was 10% lower year-over-year as it benefited from a $2 million insurance recovery gain related to a legacy environmental matter, which is excluded from adjusted results.

值得強調的是，我們第一季的業績反映出某些正在進行的法律事務的成本增加了數百萬美元，我們預計這將是暫時的，並將在25財年下半年消退。我們報告的銷售、一般及行政費用年減 10%，因為受益於與遺留環境問題相關的 200 萬美元保險追償收益，該收益未計入調整後的結果。

Turning to other ferrous dynamics in the first quarter. The share of domestic ferrous shipments was 43%. Our top sales destinations for ferrous exports were Bangladesh, Turkey, and India. Ferrous average net selling prices were 3% lower sequentially primarily driven by weaker export demand amid continued pressure from elevated levels of Chinese steel exports. Domestic prices were stable during the first quarter. In the lower price environment, the impact of average inventory accounting was a detriment of $1 per ferrous ton in the first quarter, similar to the level seen in the fourth quarter.

轉向第一季其他黑色金屬動態。國內黑色金屬出貨量佔43%。我們的黑色金屬出口主要銷售目的地是孟加拉、土耳其和印度。黑色金屬平均淨售價較上月下降 3%，主要原因是中國鋼鐵出口量持續增加導致出口需求減弱。一季國內物價維持穩定。在較低的價格環境下，第一季平均庫存核算的影響是每噸鐵損失 1 美元，與第四季的水準相似。

Now let's move to slide 8 to discuss non-ferrous sales and provide an update on our non-ferrous investments. Non-ferrous sales volumes were down 14% sequentially, primarily reflecting seasonality on flows and to a lesser extent, timing of sales. On a year-over-year basis, volumes were down 2%.

現在讓我們轉到投影片 8，討論有色金屬銷售情況並提供有關有色金屬投資的最新資訊。有色金屬銷量較上月下降 14%，主要反映了流量的季節性，其次是銷售時間的影響。與去年同期相比，銷量下降了 2%。

We sold our non-ferrous products to 13 countries with the major export destinations being Malaysia, Thailand, and India. Average net selling prices for our recycled non-ferrous products were down 6% sequentially, reflecting the decline in non-ferrous market prices from the multi-year peak reached earlier in the year. As you can see in the bottom right graph, price volatility for non-ferrous metals was significant in the last six months. Notwithstanding the volatility, prices for non-ferrous products remain at healthy levels as evidenced by the 12% rise in average net selling prices on a year-over-year basis.

我們的有色金屬產品銷往 13 個國家，主要出口目的地是馬來西亞、泰國和印度。我們的再生有色金屬產品平均淨售價較上季下降 6%，反映出有色金屬市場價格已從今年稍早達到的多年高點回落。如右下圖所示，過去六個月有色金屬的價格波動很大。儘管有波動，但有色金屬產品價格仍維持在健康水平，平均淨售價較去年同期上漲 12% 就是明證。

We continue to progress the deployment of our advanced primary non-ferrous recovery systems, which drive the incremental metal recovery and the majority of the expected contribution from our investments in technology. We advanced our ramp-up activities on several of these primary systems during the quarter.

我們繼續推進先進的初級有色金屬回收系統的部署，這將推動金屬回收的增量以及我們對技術投資的大部分預期貢獻。本季度，我們推進了其中幾個主要係統的升級活動。

As of the end of the calendar year '24, we have now completed construction and started the commissioning of the last of the currently permitted primary systems. Overall, the contribution to performance from these systems was positive in the first quarter.

截至 24 年底，我們現已完成建造並開始調試目前允許的最後一個主要係統。總體而言，這些系統在第一季對業績的貢獻是正面的。

We continue to expect to see a trend of increasing returns from these investments in the next couple of quarters and target the substantial full ramp-up of the permitted systems by Q3 of fiscal '25. Once fully operational, we continue to expect substantial returns from our investments of approximately $10 EBITDA per ferrous ton in normal market conditions.

我們繼續預計，在接下來的幾個季度中，這些投資的回報將呈現成長趨勢，並計劃在 2025 財年第三季之前實現授權系統的全面大幅提升。一旦全面投入運營，我們預計在正常市場條件下，我們的投資將獲得豐厚的回報，即每噸鐵礦石約 10 美元的 EBITDA。

Now let's move to slide 9 to discuss our steel mill performance. Finished steel sales volumes of 125,000 tons in the first quarter were down 11% sequentially due primarily to construction seasonality in our Western markets. Compared to the prior year, volumes were down 3%. Average rolling mill utilization was 81%, down from 97% sequentially and from 95% in the prior year, including due to the impact of a scheduled maintenance outage during the first quarter of fiscal '25.

現在我們轉到投影片 9，討論一下我們的鋼廠業績。第一季成品鋼銷量為 12.5 萬噸，季減 11%，主要原因是西方市場的建築季節性。與上年相比，銷量下降了 3%。平均軋機利用率為 81%，低於上一季的 97%，也低於去年的 95%，其中包括 2025 財年第一季計畫維護停機的影響。

Average net selling prices for finished steel were down by 2% sequentially and 7% year-over-year as demand in our West Coast markets has softened in the elevated interest rate environment. We believe our mill will benefit from the anticipated demand associated with the US infrastructure bill, however, as of yet, this demand has yet to meaningfully come into play in the construction market.

由於西海岸市場在利率上升的環境下需求減弱，成品鋼平均淨售價較上季下降 2%，較去年同期下降 7%。我們相信，我們的工廠將受益於與美國基礎設施法案相關的預期需求，然而，到目前為止，這種需求尚未在建築市場中發揮實質作用。

Now let's move to slide 10. Operating cash flow for the first quarter was near breakeven, including a modest benefit from working capital from lower volumes and prices and the timing of shipments and collection. We continued to manage and align capital expenditures to current performance trends, and invested $12 million in CapEx in the first quarter.

現在我們來看第 10 張投影片。第一季的經營現金流接近損益平衡，其中包括因銷售量和價格下降以及裝運和收款時間表而產生的營運資金的適度收益。我們繼續管理資本支出並使其與當前的業績趨勢保持一致，並在第一季投資了 1200 萬美元的資本支出。

Looking ahead, we now project our fiscal '25 CapEx investments to be around $60 million. Around 20% of the spend will be for growth projects, including investments to support the continued expansion of recycling services and completion of our non-ferrous technology initiatives, with the remaining spend for maintaining the business and environmental-related capital projects.

展望未來，我們預期 25 財年的資本支出約為 6,000 萬美元。約 20% 的支出將用於成長項目，包括支持繼續擴大回收服務和完成有色金屬技術計劃的投資，其餘支出將用於維持業務和與環境相關的資本項目。

As Tamara mentioned, we expect asset monetization transactions with net proceeds of $35 million to contribute to free cash flow generation in the second half of fiscal '25 subject to customary closing terms. Net debt was $430 million at the end of the first quarter. Our credit facility with a capacity of $800 million and a maturity date of August 2027, carries interest costs that are linked to short-term market rates. As a result, we benefit from the cuts in short-term interest rates by the US Federal Reserve, which have aggregated to 100 basis points since September.

正如塔瑪拉 (Tamara) 所提到的，我們預期資產貨幣化交易的淨收益為 3,500 萬美元，將根據慣例成交條款在 2025 財年下半年為自由現金流的產生做出貢獻。第一季末淨債務為4.3億美元。我們的信貸額度為 8 億美元，到期日為 2027 年 8 月，利息成本與短期市場利率掛鉤。因此，我們受惠於聯準會的短期利率下調，自9月以來，聯準會已累計下調了100個基點。

The effective tax rate for the first quarter was an expense of 11% on reported pretax results. As mentioned during last quarter's earnings call, because we are in a valuation allowance position on our deferred tax balances, and based on how the underlying mechanics work, our tax rate is subject to significant projection estimates during interim quarterly periods.

第一季的有效稅率為所報告的稅前業績費用11%。正如上個季度的收益電話會議中所提到的，由於我們對遞延稅項餘額處於估值準備金狀態，並且基於基本機制的運作方式，我們的稅率在季度中期會受到重大預測估計的影響。

Therefore, we expect to see meaningful quarter-to-quarter volatility in our tax rate due to changes in those estimates, including from company performance trends, which is what occurred in the first quarter and created a tax expense on a pretax loss. Compared to a year ago, the income tax rate drives the substantial majority of the difference in EPS results, as in the prior year, our tax rate reflected a more normal profile without the impact of a valuation allowance. We do not expect to be a cash taxpayer in fiscal '25, given the availability of net operating loss carry forwards.

因此，我們預計由於這些估計的變化（包括公司業績趨勢的變化），我們的稅率將出現顯著的季度波動，這就是第一季發生的情況，並產生了稅前虧損的稅費。與一年前相比，所得稅率是造成每股盈餘結果差異的主要原因，因為在上一年，我們的稅率反映了更正常的狀況，而沒有受到估值準備金的影響。考慮到淨營業虧損結轉的可能性，我們預期在 25 財年我們不會成為現金納稅人。

Looking ahead to the next few months, we expect to see typical winter seasonality in our recycling metals and finished steel sales volumes in our second fiscal quarter before spring seasonality in both flows and construction activity kicks in. We also anticipate a meaningful ramp-up in contribution from our technology investments and to continue to see the benefits from our productivity and cost reduction program, including an abatement of the currently elevated legal costs starting in the second half of the fiscal year.

展望未來幾個月，我們預計第二財季的回收金屬和成品鋼材銷售量將呈現典型的冬季季節性，而流通和建築活動將迎來春季季節性。我們也預期我們的技術投資貢獻將大幅增加，並將繼續看到我們的生產力和成本削減計畫帶來的好處，包括從本財政年度下半年開始降低目前高昂的法律成本。

And with that, I'll turn the call back over to Tamara.

說完這些，我將把電話轉回給塔瑪拉。

Thank you, Stefano. In mid-December, we issued our 11th Sustainability Report, which describes our progress towards our multi-year sustainability goals. I'll highlight just a few examples, and I encourage you to visit our website to view the report. We reduced our Scope 1 and 2 emissions at our recycling operations by 30% versus our 2019 baseline. In addition, we maintained 100% net carbon-free electricity usage across our operations for the fourth consecutive year. We are meeting these goals primarily through significant investments in state-of-the-art emissions control systems for our metal shredding operations and more efficient operating equipment. These achievements and many others would not have been possible without our employees living our core values of safety, sustainability, and integrity. I'm very proud of what our team has accomplished.

謝謝你，斯蒂法諾。12 月中旬，我們發布了第 11 份永續發展報告，描述了我們實現多年永續發展目標的進展。我僅重點介紹幾個例子，並鼓勵您訪問我們的網站查看報告。與 2019 年基準相比，我們將回收業務的範圍 1 和 2 排放量減少了 30%。此外，我們連續第四年在整個營運過程中維持了 100% 的淨無碳電力使用率。我們實現這些目標主要透過對金屬粉碎作業的最先進的排放控制系統和更有效率的操作設備進行大量投資。如果我們的員工沒有實踐安全、永續和誠信的核心價值觀，這些成就以及其他許多成就就不可能實現。我對我們團隊所取得的成就感到非常自豪。

During a period marked by challenging market conditions and geopolitical uncertainties, our company's steady progress reflects the agility of our workforce, the resilience of our culture, and the strength of our platform. We have an exciting year ahead of us as we execute our strategic priorities, and we are well positioned to benefit from the positive structural trends driving increased demand for recycled metals. I'd like to thank our employees for their dedication and our customers, suppliers, and communities for their partnership.

在充滿挑戰的市場條件和地緣政治不確定性的時期，我們公司的穩定發展反映了我們員工的敏捷性、我們文化的韌性以及我們平台的實力。在我們執行策略重點的過程中，我們迎來了令人興奮的一年，並且我們已做好準備，從推動再生金屬需求成長的積極結構性趨勢中獲益。我要感謝我們員工的奉獻精神以及我們的客戶、供應商和社區的合作。

And now, Marvin, let's open the call for questions.

現在，馬文，讓我們開始提問。

(Operator Instructions)

（操作員指示）

Samuel McKinney, KeyBanc Capital Markets.

麥金尼 (Samuel McKinney)，KeyBanc 資本市場。

Hi, Tamara and Stefano. Good morning.

你好，塔瑪拉和斯特凡諾。早安.

Good morning.

早安.

Good morning.

早安.

Hey, starting in the export market. The first quarter export ferrous pricing posted its softest quarterly level over the last handful of years. Can you talk about the elevated export level still coming out of China? Any potential relief on that front? And what else you're seeing in the export market?

嘿，從出口市場開始。第一季黑色金屬出口價格創下過去幾年來的最低季度水準。能談談中國出口水準持續上升的情況嗎？這方面有任何潛在的緩解嗎？您還看到了出口市場什麼狀況？

Sure. So as you highlighted and as we mentioned, the Chinese steel overproduction has clearly had a dampening effect on markets around the world, in Asia, in Central and South America, in Turkey, and elsewhere. What we expect is to see a pullback of this excess production and excess exports from China.

當然。正如您所強調的以及我們所提到的，中國鋼鐵產能過剩顯然對全球市場、亞洲、中美洲和南美洲、土耳其和其他地區的市場產生了抑製作用。我們預計中國過剩的生產和出口將會減少。

We expect to see to pull back because other countries are going to push back on these cheap exports that hurt their domestic steel production. We've seen this dynamic before and we have seen how quickly it can turn. So, we are anticipating a correction. We can't give you the time, but we do anticipate a correction.

我們預計會出現回落，因為其他國家將會抵制這些損害其國內鋼鐵生產的廉價出口。我們以前見過這種動態，也看到它轉變得有多快。因此，我們預期會出現修正。我們無法給您時間，但我們確實期待糾正。

Okay. And then my next question would be on interest expense. First quarter interest expense was relatively flattish sequentially, but that number rose about $4 million year-over-year. I know a recent amendment to the credit facility has increased your cost of money, but any info you can give us on how you plan to manage the debt and that rising interest expense moving forward?

好的。我的下一個問題是關於利息費用。第一季的利息支出與上一季相比持平，但與去年同期相比增加了約 400 萬美元。我知道最近對信貸安排的修改增加了您的資金成本，但您能否向我們提供任何信息，說明您計劃如何管理債務以及未來不斷上漲的利息費用？

Hi Sam, this is Stefano. So, on the first part of your question, the impact of the cost of the amendment to the credit facility that we executed back in June is now fully reflected in our interest cost profile in Q1 '25. Those were onetime costs that were paid in cash at the time of execution of the amendment. From an accounting perspective, they are amortized interest expense over the remaining life of the facility, which expires in August '27. So at this point, those costs that flow through interest expense are noncash and they were not material to start with.

你好，山姆，我是斯特凡諾。因此，關於您問題的第一部分，我們 6 月執行的信貸安排修改的成本影響現已完全反映在我們 2025 年第一季的利息成本狀況中。這些是一次性費用，在執行修正案時以現金支付。從會計角度來看，它們是該設施剩餘使用壽命內的攤銷利息費用，該設施將於 27 年 8 月到期。因此，此時，透過利息費用流動的成本是非現金的，而且它們一開始就不是重要的。

On the second part of your question, obviously, I mentioned in my prepared remarks, the interest rates decline that we have seen with a reduction of over -- of 100 basis points since the Fed started cutting rates back in September, that does and will benefit our interest costs since our line of credit is based on short-term interest rates. And because of the timing of when those reductions occurred, the benefits are only very partially reflected in our fiscal Q1 and will be, therefore, reflected in full in Q2.

關於你問題的第二部分，顯然，我在準備好的發言中提到，自從聯準會 9 月開始降息以來，我們已經看到利率下降了 100 多個基點，這確實有利於我們的利息成本，因為我們的信貸額度是基於短期利率的。而且由於這些削減發生的時間，其收益只能部分反映在我們的財政第一季度，因此將在第二季度全部反映出來。

And overall, from a debt perspective, we have a line of credit with a capacity of $800 million. We have $430 million at the end of Q1 outstanding. And really, that level of debt is also reflective of the investments we made in the last couple of years, including on the nonferrous recovery technologies, where we now expect -- as Tamara mentioned and I mentioned, we expect those returns to expand and have a strong payback. So, we view our liquidity from a positive perspective.

總體而言，從債務角度來看，我們的信用額度為 8 億美元。截至第一季末，我們未償還債務為 4.3 億美元。事實上，這種債務水平也反映了我們過去幾年所做的投資，包括對有色金屬回收技術的投資，正如塔瑪拉和我所提到的，我們現在預計這些回報將會擴大並獲得豐厚的回報。因此，我們從正面的角度看待我們的流動性。

The path that we're looking forward is clearly improving the potential performance and operating cash flow generation to self-help initiatives or strategic initiatives. And as Tamara just mentioned, expecting market conditions to recover as well. So those are the catalysts we have managed and aligned our CapEx and flex the CapEx to align with cash flow generation we expect $60 million in CapEx spend in FY25.

我們期待的道路顯然是提高潛在績效和經營現金流的產生，以實現自助計劃或策略計劃。正如塔瑪拉剛才所提到的，預計市場狀況也將復甦。因此，這些是我們管理的催化劑，並調整了我們的資本支出，使資本支出與現金流產生保持一致，我們預計 25 財年的資本支出為 6000 萬美元。

We have asset monetization opportunities. We already have two properties under contract. We expect cash proceeds of $35 million. Those will be supportive of free cash flow generation and the interest cost going lower. So, from that perspective, that's the context on the debt interest cost sentence.

我們有資產貨幣化的機會。我們已經簽了兩處房產的合約。我們預計現金收益為 3500 萬美元。這些將有助於自由現金流的產生和利息成本的降低。因此，從這個角度來看，這就是債務利息成本句的背景。

Okay. Thank you.

好的。謝謝。

Thank you.

謝謝。

Thank you.

謝謝。

Thank you. I'm showing no further questions at this time. I'll now turn it back to Tamara Lundgren for closing remarks.

謝謝。我目前沒有其他問題。現在請塔瑪拉‧倫德格倫 (Tamara Lundgren) 作結束語。

Thank you Marvin and thank you all for your time today. We look forward to speaking with you again when we report our second quarter results in April. In the interim, stay safe and stay well.

謝謝馬文，也謝謝大家今天抽出時間。我們期待在四月報告第二季度業績時再次與您交談。在此期間，請注意安全，保重身體。

Thank you for the participation in today's conference. This does conclude the program. You may now disconnect.

感謝大家參加今天的會議。該計劃確實就此結束。您現在可以斷開連線。