Radius Recycling says half of cost efficiency benefits to be achieved in Q3

During the second quarter, the company implemented a plan to reduce selling, general and administrative expense by 10% and increase production cost efficiencies to deliver $40M in aggregate annual benefits, which are in addition to the $30M in annual benefits previously announced that were substantially implemented in the second quarter. The new measures include reductions in headcount and other employee-related expenses, as well as decreases in non-trade procurement spend, transportation and logistics, and other outside services. Approximately half of the targeted quarterly run-rate benefits from these initiatives are expected to be achieved in the third quarter, with substantially all of the remainder by the end of the fiscal year. The Company expects to incur related restructuring charges and other exit-related costs in the range of $6 million, of which $3 million are expected to be incurred during the second quarter. The company continued, “Scrap supply flows should improve with normal seasonality and benefit as U.S. interest rates decline and global manufacturing activity recovers. On the demand side, decarbonization trends continue to be a positive driver for our products and services. Many low carbon technologies are more metal intensive than the technologies they are replacing and recycled metals require less carbon to produce than mined metals. With our 100+ operating facilities producing recycled ferrous volumes of over four million tons and nonferrous volumes of over 700 million pounds annually, our low carbon and net zero carbon emission GRNTM finished steel products, and our 3PRTM service and supply chain solution that enables our customers to increase their recycling rates, we are well-positioned to benefit from market improvements and these positive structural demand trends.”