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Russel Metals Reports 2024 Financial Performance

On February 12, 2025, Russel Metals Inc. (TSX: RUS) published its financial outcomes for the fourth quarter and the entire year ending December 31, 2024. The results showcase a resilient business performance amidst fluctuating market conditions.

Financial Highlights

In 2024, Russel Metals achieved a remarkable revenue of $4.3 billion, slightly down from $4.5 billion in 2023. The fourth quarter revenue stood at $1.0 billion, on par with the previous year's fourth quarter. EBITDA for the year was recorded at $299 million, a decline from $426 million the year prior. Notably, net income for the whole year was $161 million, equivalent to $2.73 per share, down from $267 million or $4.33 per share in 2023.

Cash flow from operating activities also reflected solid results, with $344 million generated throughout 2024, including $110 million in the fourth quarter alone. During this period, the company undertook two significant acquisitions, significantly contributing to its strategic growth.

Acquisitions and Investments

Russel Metals actively pursued expansion through acquisitions in 2024, including the notable acquisition of seven service center locations from Samuel, Son & Co., Limited, for a net capital investment of $167 million. Additionally, the acquisition of Tampa Bay Steel for around $75 million showed promising potential to enhance the company's market share and processing capabilities in the Florida region. Furthermore, Russel Metals invested a record $90 million in capital expenditures, focusing on value-added equipment and modernizing its facilities across Canada and the U.S.

Market Dynamics

Market conditions indicated a stabilization of steel prices, which had previously seen significant fluctuations throughout the year. The average price for hot rolled coil and plate was reported at $776 per ton and $1,074 per ton, respectively, marking declines of 14% and 27% compared to 2023. The metals service center segment experienced a 13% decrease year-over-year, primarily due to a diverse product mix and a growing share of value-added processing.

Shareholder Returns

Russel Metals shifted its approach towards returning capital to shareholders. In 2024, it repurchased shares worth $131 million and distributed $98 million to shareholders in the form of dividends. This strategic shift included a 5% increase in quarterly dividends, raising the amount from $0.40 to $0.42 per share.

Looking Ahead

With the steel market showing signs of stabilization and the U.S. government expecting to introduce tariffs on several imports, including metals, Russel Metals aims to leverage these developments to enhance its operational efficiencies. The company anticipates a full-year contribution from its recent acquisitions while continuing to invest in value-added equipment and modernizing its facilities.

As part of its long-term growth strategy, Russel Metals remains focused on diversification across its service segments. Projections indicate a favorable outlook for North American metals consumption, driven by infrastructure spending and onshoring activities.

Conclusion

Overall, Russel Metals’ 2024 financial performance illustrates its resilience and proactive growth strategies amidst challenging market dynamics. The company's commitment to investing in acquisitions and enhancing operational efficiencies positions it well for future opportunities in the metals distribution sector.