Ladies and gentlemen, thank you for standing by. I am Kelly, your Chorus Call operator. Welcome, and thank you for joining the Erdemir conference call and live webcast to present and discuss the second quarter twenty twenty-four financial results. All participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a question-and-answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. Please note, Ereğli Demir ve Çelik Fabrikaları T.A.Ş., Erdemir, may, when necessary, make written or verbal announcements about forward-looking information, expectations, estimates, targets, assessments, and opinions. Erdemir has made the necessary arrangements about the amounts and results of such information through its disclosure policy and has shared such policy with the public through the Erdemir website in accordance with the Capital Markets Board regulations.
As stated in related policy information, contained forward-looking statements, whether verbal or written, should not include unrealistic assumptions or forecasts. It should be noted actual results could materially differ from estimates, taking into account the fact that they are not based on historical facts, but are driven from expectations, beliefs, plans, targets, and other factors which are beyond the control of our company. As a result, forward-looking statements should not be fully trusted or taken as granted. Forward-looking statements should be considered valid only considering the conditions prevailing at the time of the announcement. In cases where it is understood that forward-looking statements are no longer achievable, such matter will be announced to the public, and the statements will be revised. However, the decision to make a revision is a result of subjective evaluation.
Therefore, it should be noted when a party is coming to a judgment based on estimates and forward-looking statements, our company may not have made a revision at the particular time. Our company makes no commitments to make regular revisions, which would fully cover changes in every parameter. New factors may arise in the future, which may not be possible to foresee at this moment in time. At this time, excuse me, I would like to turn the conference over to Ms. İdil Önay Ergin, Investor Relations Director. Ms. Ergin, you may now proceed.
Thank you very much, Kelly. Good afternoon, everyone, welcome to our conference call and webcast of Erdemir for the second quarter of twenty twenty-four. Today, our Financial Controller and Reporting Director, Mr. Ulaş Şimşek, is also joining the webcast. First of all, I will go through our master presentation, which you can find on our website, and you can also follow it through the webcast, and then at the end of this presentation, there is going to be a Q&A session as usual. Our presentation consists two sections, as you already know. The first one is market overview, and then the financial results, so let's start with the commodity prices. On page three, you will see the prices of two related commodities and HRC. Let's take a look at coking coal, iron ore, scrap, and HRC prices.
Price level of coking coal was around $324 per ton at the beginning of the year. It reached its lowest level of $204 dollar per ton in the spot market as of today. Australian coking coal prices trended down in July, likely due to the easing of weather and transport disruptions that have caused supply concerns earlier this year. Cyclones Jasper and Kirrily disrupted output and caused extended port queues in Q1. Iron ore price was around $140 dollar per ton at the beginning of the year, and it has reached to $93 dollar per ton today. The decline in iron ore, which faced demand pressure due to the decrease in steel production in China last week below the $100 dollar level in both forward and spot prices, has attracted attention.
It is also possible to say that the increase in cargo arriving at ports in China puts pressure on iron ore. Scrap price was around $413 per ton at the beginning of the year, and the current scrap price is around $374 per ton. The prices in Turkish import scrap market continued to seek direction. While interest in scrap purchasing continued to remain weak in Turkish markets due to the weak finished product sales and low price billet bookings, buyers continued to resist high price scrap offers. On the bottom right, we show HRC prices in Black Sea, China, and South Europe. While HRC demand continues to remain weak in China, steel producers have started maintenance work to reduce production and support prices.
In Europe, local HRC demand continued to remain sluggish, especially as most of the producers in the South went into holiday while prices remained relatively flat compared to previous weeks. On page four, you will see the production, consumption, exports, and import figures of Turkish steel markets for the six months of 2024. While consumption decreased by 4%, production increased by 12%. Exports of steel products increased by 45% in quantity in the first half of the year, reaching 6.5 million tons. Imports decreased by 14% to 8.2 million tons in the same period. The export-import coverage ratio increased to 79% in six months of 2024 from 36% to 38% in six months of last year.
In the first half figures of 2023, production and exports decreased due to the earthquake effect, while imports increased. With the return to normal production levels in 2024, production and exports increased, while consumption and imports decreased slightly. Let's take a look at the financial results and operational metrics. On page 36, you will see the brief summary of our first half results. We achieved $3.2 billion revenue, and we generated $441 million EBITDA, and $316 million net profit. On page 7, you will see the operational indicators of our company. The results achieved in the first half for sales and production are within our historical averages. We aim to achieve sales above 8 million tons in 2024.
We are back to the level of 93% in crude steel capacity utilization ratio after the earthquake. As you already know, this ratio is far better than the world's average, so let's take a look at the segmental breakdown of domestic sales and export volumes in page eight. As you can see from the pie chart, there has been a slight change between sectors due to the effect of market and demand conditions when we compare to last year's breakdown. There has been a transition from pipe and profile and distribution chains to general manufacturing. We see similar situation in the long products. However, the fact that the Isdemir production stopped for almost three months, which was affected by the earthquake, in the first quarter of last year, is also effective in these numbers.
As I mentioned in the previous slide, the unusual decline in exports is mainly caused by the earthquake, as seen in the last year's first quarter exports. As of first half of 2024, we are back to 19% export level. On page nine, you can find breakdown of revenue for domestic and export sales. 81% of the revenue comes from domestic sales in line with the domestic volume. The average of second quarter sales prices for flat and long steel decreased compared to the previous quarter, in line with the global commodity prices. We generated $113 EBITDA per ton in the first half. In 2024, we expect to see between $90 and $100 per ton due to the slowdown in both world economy and steel sector.
Despite import pressure in the domestic market, we achieved to generate $441 million EBITDA and $316 million net profit in the first half. On page 10, you can see how we reached to net profit from EBITDA. One of the largest items was depreciation, which was $127 million in six months. The other major item in this chart was financial expenses. Net interest expense was $96 million in six months, and the majority of this interest expense arises from financing ongoing investments. Tax income was $25 million due to the deferred tax income, and after other expenses, net profit was $316 million.
The additional insurance income accrues of $105 million, recorded as income in the first half, is not included in the EBITDA calculation since it is one of adjustments. While calculating the net profit, $105 million of the $109 million consolidation classification arises from additional insurance income accruals. In the graph below, you can see EBITDA through change in cash bridge. Working capital increased due to inventories. Also, we spend around $545 million dollars, excuse me, to capital expenditures in six months. This amount also includes advances paid for the capital expenditures as well, and that you will see the difference between the CapEx page in page thirteen and this one.
On page eleven, you will see historical trend of financial borrowings and net debt. When we look at the first half of 2024, our net working capital increased compared to 2023 due to the raw material procurement. Our net debt position was $1.9 billion at the end of first half. Due to the ongoing capital expenditures, the net debt EBITDA ratio was 2.2 multiplier. We aim to keep our net debt EBITDA ratio below 2.5 multiplier for the rest of the year. Slide twelve represents our cost of sales breakdown. The use of imported semi-finished products, imported slab, increased due to the halt of production at Isdemir for almost three months due to the earthquake last year.
As our own slab production returns to normal level in the first half of 2024, the share of iron ore and pellets in our cost structure increased. Therefore, imported semi-finished products, which are included in other items, was decreased. Page 13 represents the historical CapEx spending. Total CapEx spending is $421 million in six months. When we add the advanced payments of $124 million to this figure, we reach the investment expenditure of $545 million. The new first blast furnace in Isdemir and number 4 coke battery in Erdemir will be commissioned until the end of this year. We expect that CapEx will reach up to $1 billion again in 2024, with maintenance and other ongoing investments.
So on page fourteen, as we announced last quarter, we are proud to announce our net zero roadmap in January this year. We aim to reduce carbon emissions per ton by 25% by 2030, 40% by 2040, and achieve net zero emissions by 2050, compared to the base year of 2022. We plan to spend $3.2 billion for transformational investments of Erdemir and Isdemir by the end of 2030. Almost 70%-80% of the $3.2 billion investment will be sourced externally, utilizing easily accessible financial resources for the green transformation. Erdemir and Isdemir steel capacity will reach 13 million tons by 2030. Now we may continue with the Q&A session. We'll be delighted to answer your questions.
Thank you for listening.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star, followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. Please use your handset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question is from the line of Jason Fairclough with Bank of America Securities. Please go ahead.
Yeah. Good afternoon, İdil. Thanks for the presentation. Thanks for the update. Just a couple quick ones from me. First, could you update us on the status of the other current assets, which would be the VAT receivables and the insurance payments? Are all the insurance payments paid out now, and where are we in terms of turning VAT receivables into cash?
Hi, Jason. So actually, we received as cash our tax receivable in Q2. And also in last quarter, I think we announced that we already received it. So it has an effect on the second quarter cash. Also on the insurance side, we also get all the advanced payments, the second advanced payments of $105 million in the second quarter as well.
Just so that I'm clear, if we look at the other assets, the other current assets, which I think in lira is about TRY 13 billion, is that normal now? I think in the past you talked about a much lower number being normal. Yeah?
Correct. I mean, the current level is the normal level, actually.
Okay. The other question I have for you is in terms of the pellet plant. I think that's part of the current CapEx program. Could you just confirm that? And when should we think about the first pellet and the iron ore from that captive plant coming through or your factories?
We are expecting in 2027, Jason. All right, thank you very much. You're welcome.
The next question is from the line of Zenande Meyiwa from UBS. Please go ahead.
Oh, thank you. Thank you, management, for taking my questions. Just a few quick questions. I was just wondering maybe if you could give us a bit of color on your expectations for working capital going into Q3 and maybe Q4, if you can. And then, just on the import situation with China having exported quite a lot of product globally, do you expect any action from government just to curb some of that import pressure and protect the domestic market? Thank you.
Hi, Zenanda. So, yes, I can share our expectation for Q3 and Q4. So, as Isdemir, currently, our order book is full for two months, and we don't expect to see a lower level than this. So we expect to see sales of above eight million tons in total in 2024. So it's on the normal level, actually. But in line with the global trend, there were decline in commodity prices in the second quarter. And in the first half, HRC prices declined more sharply compared to iron ore prices, and causing a contraction of margins in global markets. So if this decline continues in the second half of the year, profitability ratios are expected to decrease further.
So as I mentioned during the presentation, we expect to have $90-$100 per ton EBITDA for 2024. So this is the general view for the rest of the year. And for your second question, of course, import is one of the most important issues in Turkish steel market. So while there is a decreasing trend in domestic demand in China, the productivity increases continue rapidly. So I'll just would like to mention the ongoing anti-dumping investigation against HRC, originating from China, India, Japan, and Russia. The Turkish Ministry of Trade, a couple of weeks ago, has reached the stage of sharing the final notification report with the relevant parties. So most probably in a couple of months, we will hear the final decision.
The process is expected to have a positive impact on fourth quarter and beyond.
Okay. Thank you very much. That's, that's clear.
You're welcome.
The next question is from the line of Athana Ekoko with Morgan Stanley. Please go ahead.
Hi, thank you for the presentation and for taking my questions. I just have one remaining question on your short-term debt figure. This is quite high, and we just had we just wondered whether you have any plans on how you're going to reduce or refinance?
Hi, Athana. Actually, very recently, we issued a Eurobond, and this Eurobond will help to refinance our short-term debt. For example, the share of our long-term debt in total debts increased from 18% in the first quarter to 50% after the Eurobond issuance. The Eurobond issuance will help refinancing our short-term debt.
Mr. Ekoro, Mrs. Ekoko, are you finished with your questions?
Hi, sorry, no, that's perfect. Thank you.
Thank you. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Ms. Ergin for any closing comments. Thank you.
Thank you very much for joining us. We hope to meet you again in our third quarter call. Have a nice day. Thank you.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.