Steel Dynamics Reports 7% Decline in Q1 2025 Net Sales and 63% Drop in Net Income

Steel Dynamics, Inc. (SDI) reported a significant decline in financial performance for the first quarter of 2025, with total net sales of $4.37 billion, down 7% from $4.69 billion in the same period of 2024. The company's net income attributable to Steel Dynamics, Inc. stockholders fell to $217.2 million, a decrease of 63% compared to $584.0 million in the prior year. This decline was primarily driven by reduced operating income, which dropped 63% to $275.1 million, reflecting lower metal spreads in the steel and fabrication operations segments.

The company's steel operations segment, which accounted for approximately 70% of consolidated net sales, experienced a 10% decrease in net sales to $3.15 billion, down from $3.51 billion in the previous year. Despite achieving record shipments of 3.5 million tons, average selling prices decreased by 17%, leading to a 66% drop in operating income to $228.9 million. Conversely, the metals recycling operations segment saw a 3% increase in net sales to $1.07 billion, benefiting from steady domestic steel demand and improved metal spreads, resulting in a 102% increase in operating income to $25.7 million.

In terms of strategic developments, Steel Dynamics has been actively investing in its aluminum operations, with plans to launch a new recycled aluminum flat rolled products mill in Columbus, Mississippi, expected to begin operations in mid-2025. The company also reported a 14% increase in selling, general, and administrative expenses, primarily due to growth in the aluminum segment. Additionally, SDI's total outstanding debt rose to $4.2 billion, an increase of $965.1 million from the end of 2024, following the issuance of senior unsecured notes intended for general corporate purposes.

Operationally, Steel Dynamics reported a 20% increase in working capital to $4.0 billion, driven by a significant rise in cash and equivalents, which reached $1.19 billion. The company also declared a quarterly cash dividend of $0.50 per share, reflecting a 9% increase from the previous year. Looking ahead, Steel Dynamics anticipates continued challenges in the steel market due to fluctuating prices and competition, but remains optimistic about its growth strategy, particularly in the aluminum sector, which is expected to diversify its product offerings and enhance profitability in the long term.