Aperam reports strong Q2 results driven by Brazil operations

Investing.com -- Aperam (AS:APAM) on Thursday delivered second-quarter adjusted EBITDA of €112 million, exceeding analyst expectations of €108 million and showing significant improvement from €86 million in the first quarter.

The stainless steel producer’s performance was primarily boosted by its Brazilian operations, which benefited from an upgraded hot rolling mill and robust demand. The company’s Alloys segment also contributed positively following the full consolidation of Universal.

Despite the overall strong results, Aperam faced challenges in Europe where pricing pressure intensified and imports reached 24% of the market, further weakening an already soft environment.

Free cash flow before dividends reached €158 million, supported by €61 million in working capital inflows. Capital expenditure stood at €38 million, aligning with the company’s full-year guidance of approximately €200 million.

The company’s Leadership Journey program delivered €20 million in gains during the quarter, bringing cumulative benefits to €136 million. This initiative remains on track to achieve its target of €200 million between 2024-2026.

By segment, Stainless & Electrical Steel outperformed expectations with EBITDA of €65 million versus consensus of €44 million, as higher shipments and sales in Brazil offset European challenges.

The Alloys & Specialties segment met projections with €38 million EBITDA, benefiting from higher volumes and improved margins.

However, Services & Solutions underperformed with €6 million EBITDA against €14 million consensus due to lower volumes and price pressures. The Recycling & Renewables segment also missed expectations, generating €12 million versus €19 million consensus amid lower selling prices and volumes.

Looking ahead, Aperam expects third-quarter EBITDA to decrease quarter-over-quarter, primarily due to seasonally weaker demand and increasing price pressure in Europe.

The company anticipates a slight reduction in net debt through working capital optimization, with full normalization expected by the end of 2027.