Radius Recycling Inc (NASDAQ:RDUS) stock rose 0.87% (As on April 5, 11:17:25 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the second quarter of fiscal 2024. Market conditions during the second quarter remained challenging, as tight supply flows for recycled metals and unusually wet winter weather impacted sales volumes and metals spreads for both recycled metals and finished steel. Scrap generation remained constrained due to persistently low levels of manufacturing activity in the U.S. After strengthening in the early part of the quarter driven by restocking, market conditions for ferrous recycled metals softened due to lower global demand including as a result of continued elevated levels of Chinese steel exports.
Ferrous sales volumes decreased by 15% sequentially due to the lower supply flows and delays of certain bulk shipments at the end of the quarter. Nonferrous sales volumes decreased by 3% sequentially, but increased by 7% year-over-year supported by additional production from the Company’s advanced nonferrous recovery technologies and platform expansion. Finished steel sales volumes increased by 5% year-over-year, reflecting the continued strength of non-residential and infrastructure demand in the Western U.S. Sequentially, finished steel sales volumes decreased by 11% due to seasonally lower construction demand exacerbated by a prolonged period of rain on the West Coast.
Moreover, the average net selling prices for ferrous recycled metals increased by 8% sequentially, benefiting from the strengthening in global prices in the early part of the quarter driven by restocking, before softening due to lower demand including as a result of continued elevated levels of Chinese steel exports. Average net selling prices for nonferrous recycled metals increased by 3% sequentially and for finished steel products remained flat sequentially.
RDUS in the second quarter of fiscal 2024 has reported the adjusted earnings per share of $-1.04, missing the analysts’ estimates for the adjusted earnings per share of $-0.66. The company had reported the adjusted revenue of $621.06 million in the second quarter of fiscal 2024, missing the analysts’ estimates for revenue of $646.85 million. The second quarter had an operating cash outflow of $55 million, reflecting an increase in net working capital due primarily to the timing of shipments and collections. At the end of the quarter, total debt was $374 million and net debt was $360 million.
Capital expenditures were $15 million in the second quarter. The Company expects fiscal 2024 capital expenditures to be approximately $80 million, including the completion of our nonferrous technology initiatives and investments to support recycling services expansion.