Tree Island Steel Announces Full-Year 2024 Financial Results: Navigating Market Pressures and Strategic Adjustments
Vancouver, British Columbia, March 13, 2025 — Tree Island Steel (TSX: TSL) reported its financial results for the year ended December 31, 2024, showing significant declines in key financial metrics. The company faced persistent challenges throughout 2024, primarily stemming from competitive pricing pressures, slower demand across market segments, and the impact of tariffs affecting exports to the U.S.
Fourth-Quarter Financial Performance
For the three-month period ending December 31, 2024, Tree Island Steel saw a drop in revenue, which decreased by $2.5 million to $44.8 million from $47.3 million during the same period in 2023. This decrease was attributed to lower average selling prices and a narrowing margin between selling prices and raw material costs. The company noted that competitive pricing pressures, particularly from imports, were especially felt in the residential and industrial sectors.
• Gross profit for Q4 2024 dropped sharply to $0.3 million, compared to $3.4 million in the same quarter of 2023.
• Adjusted EBITDA also declined to a negative $1.6 million, from a positive $0.9 million during Q4 2023.
These declines reflect the company’s struggles to maintain profitability in a highly competitive environment, especially given the broader market conditions and import pricing issues.
Full-Year 2024 Financial Results
For the full year, Tree Island Steel saw a decrease in revenue, which fell by $32.6 million to $207.0 million in 2024, down from $239.6 million in 2023. This significant revenue drop was due to the same challenges seen in the fourth quarter, including pressure from aggressive import pricing and slower-than-expected demand.
• Gross profit for 2024 dropped to $11.8 million, from $30.3 million in 2023.
• Adjusted EBITDA also saw a decline, falling to $4.4 million compared to $21.5 million in 2023.
Ongoing Market Pressures and Tariff Uncertainty
Tree Island Steel’s Chief Operating Officer, Nancy Davies, commented on the market uncertainty that affected the company throughout 2024. The pressures included slower demand from customers, particularly in the construction and industrial sectors, combined with pricing pressures from competitors. Additionally, the US Section 232 Steel and Aluminum tariffs, which were extended to include Canada, further added to the uncertainty in the steel export market.
The inclusion of Canada in the US tariffs had an adverse impact on Tree Island’s exports to the U.S., complicating the company’s ability to remain competitive in key markets. This external factor created additional strain on profit margins and the overall financial performance of the company.
Cost Management and Dividend Adjustment
In response to the challenging economic conditions, Tree Island Steel took proactive steps to manage its costs. Despite these efforts, the company faced significant operational hurdles. In light of the ongoing uncertainty and the weaker-than-expected financial results, Tree Island Steel’s Board of Directors decided to reduce its quarterly dividend by 50%, bringing it down to $0.015 per share. The reduced dividend will be paid on April 15, 2025, to holders of record as of March 31, 2025.
Looking Ahead: Strategic Focus
Despite the disappointing financial results, Tree Island Steel remains committed to managing its operations effectively and navigating the tough economic landscape. The company plans to leverage its operational capabilities in both Canada and the United States to address the challenges posed by market conditions and international trade factors.
However, the continued uncertainty regarding trade policies, especially around steel tariffs, and competition from foreign producers means that Tree Island Steel will need to remain agile in its approach to adapt to shifting market dynamics in 2025.
Key Takeaways:
• Revenue Decrease: Q4 2024 revenue dropped to $44.8 million, down from $47.3 million in Q4 2023, primarily due to competitive pricing pressures and lower selling prices.
• Gross Profit Decline: Q4 gross profit decreased to $0.3 million, from $3.4 million in Q4 2023, reflecting the impact of narrowing margins.
• Adjusted EBITDA: Tree Island Steel’s Adjusted EBITDA fell to a negative $1.6 million for Q4 2024, down from $0.9 million in Q4 2023.
• Full-Year Results: For 2024, the company’s revenue dropped by $32.6 million to $207.0 million, and Adjusted EBITDA fell to $4.4 million, down from $21.5 million in 2023.
• Impact of Tariffs: The US Section 232 tariffs on steel and aluminum, now extended to Canada, have added to pricing pressures and market uncertainty for the company.
• Dividend Reduction: In response to the financial challenges, Tree Island Steel has cut its quarterly dividend by 50% to $0.015 per share for Q1 2025.
• Cost Management Strategy: The company has focused on cost management to cope with slower customer demand and pricing pressures but continues to face a tough competitive environment.
• Economic Uncertainty: The company continues to navigate economic uncertainties, including slower demand, tariffs, and aggressive competition, affecting its profitability and market position.
