STEEL DYNAMICS INC Q3 FY2025 earnings call

• Record steel shipments of 3,600,000 tons achieved with revenues at $4.8 billion and adjusted EBITDA at $664 million.
• Sinton had a record quarter for shipments with downstream coating and prepaint product quality maturing and value add portfolio expanding.
• Lilleham team made strong progress in commissioning and ramping operations, receiving quality certifications, and CAN sheet performing well.
• Biocarbon team shipped first product in September, aiding decarbonization efforts.
• All company steel mills achieved global Steel Climate Council product certification, providing transparency and confidence for lower embodied carbon steel.
• World-class safety culture continues to mature with strong results from the Take Control of Safety program.

Steel Dynamics reported third quarter 2025 results with record steel shipments of 3,600,000 tons, revenues of $4.8 billion, adjusted EBITDA of $664 million, and cash flow from operations of $723 million. The steel operations generated operating income of $498 million in the third quarter, 30% higher sequentially due to record shipments and metal spread expansion. Average scrap cost declined $27 per ton while average realized pricing only declined $15 per ton. Mill recycling operations had operating income of $32 million, significantly above sequential second quarter results, driven by near record shipments and metal spread expansion. Steel fabrication achieved operating income of $107 million, 15% higher than second quarter due to increased volume. Aluminum operations had startup operating loss of $57 million in the third quarter, but are expected to achieve monthly EBITDA breakeven or better in Q4 2025. The steel segment contributed a major portion to revenues, with the recycling and fabrication segments also playing significant roles.

• Aluminum operations expected to achieve monthly EBITDA breakeven or better in Q4 2025.
• Capital investments for 2026 are estimated to be in the range of $500 million to $600 million.
• Continues to have $1 billion available for share repurchases as of September 30.
• Believes through cycle EBITDA of 650 to 700 million is achievable for aluminum operations plus an additional 40 to $50 million for omni operations.
• Anticipates exit of 2026 at a 75% utilization rate as they ramp and optimize product mix.

• Risks related to integrating or starting up new assets in the aluminum industry.
• Use of estimates and assumptions in connection with anticipated project returns.
• General business and economic conditions impacting steel, metals recycling, and fabrication businesses.
• Supply chain dislocations and reshoring of manufacturing by OEMs.

Q: Katja Jancic asked about aluminum rolling mill quality qualifications and its impact on commercial activities, specifically longer term contracts.

A: Mark Millett and Theresa Wagler responded that accelerated qualifications are helping, with negotiations for longer term contracts in can sheet and automotive already underway.

Q: Tristan Gresser inquired about aluminum ramp, EBITDA breakeven, and capital allocation for next year.

A: Theresa Wagler stated they still expect EBITDA breakeven in Q4 2025, and Mark Millett mentioned balanced cash allocation with potential increase in dividend and continued share repurchases.

Q: Timna Tanners asked about aluminum vs steel substitution concerns and CapEx for aluminum startup.

A: Mark Millett responded on confidentiality of aluminum relationships and CapEx increase due to construction challenges and labor issues.

Q: Carlos De Alba asked about aluminum business growth and potential steel substitution.

A: Mark Millett and Theresa Wagler discussed growth opportunities in aluminum, including downstream pre paint capabilities, and the ongoing deficit of flat rolled sheet in the US independent of trade actions.

Q: Andrew Jones asked about Sindhin's EBITDA contribution and tax implications.

A: Theresa Wagler stated Sindhin was EBITDA positive but not at full through cycle magnitude, and discussed tax movements with effective tax rates expected to be around 23% in 2026.

Q: Michael Harris asked about bio carbon material impact on cost structure and onetime sales in record shipments.

A: Theresa Wagler said bio carbon material won't have material cost impact currently and record shipments were not due to onetime sales.

Q: William Peterson asked about steel mill shipments in Q4 and auto market strategy.

A: Theresa Wagler and Barry Schneider discussed Q4 maintenance impacts and the auto market strategy focusing on low carbon content products and growing organically with customers.

Q: John Tumazos asked about scrap cost drop and aluminum sales realization.

A: Mark Millett discussed scrap cost as more noise than significant and refrained from specific aluminum sales realization details, but stated aluminum returns are achievable.