Slower 4th quarter cuts into Aperam profits

Luxembourg-based stainless steel producer and recycler Aperam SA credits its full-year ownership of scrap subsidiary ELG Metals in part for its increased revenue and shipments in 2022 compared with the prior year.

The company recorded about 8.15 billion euros ($8.7 billion) in sales in 2022, representing a 37.4 percent increase from the 5.1 billion euros ($5.44 billion) of sales in 2021. Despite the increased sales figure, however, Aperam’s earnings before interest, taxes, depreciation and amortization (EBITDA) declined about 9.3 percent in 2022. The EBITDA figure fell from 1.186 billion euros ($1.27 billion) in 2021 to 1.076 billion euros ($1.15 billion) in 2022.

Aperamsays its sales and profits declined in the final three months of 2022. Sales for the fourth quarter decreased by 11 percent from the prior quarter, with the company citing “pronounced destocking by customers in Europe.”

EBITDA in the fourth quarter of 2022 decreased nearly 41 percent compared with the prior quarter, falling from 235 million euros ($250.7 million) to 129 million euros ($137.6 million). Aperam cites as the causes predominantly “negative inventory valuation, lower volumes and a price/cost squeeze.”

In its review of the 2022 full year, Aperam says factors in its revenue growth were “the first-time consolidation of ELG and higher realized prices.” By volume, the company’s shipments of materials in 2022 increased by nearly 27 percent to more than 2.3 million metric tons compared with about 1.82 million metric tons in 2021.

On the personnel and corporate strategy front, the company says in December 2022 it made “changes at the leadership team level to support our clear roadmap toward becoming a competitive and diversified actor in the circular economy.”

Specifically, Aperam says Bernard Hallemans “took over the current chief technology officer (CTO) organization, with the ESG team and projects at its core [and] Aperam Recycling also being part of his perimeter.” The company also appointed Geert Verbeeck as CEO of Stainless Europe. Verbeeck has “extensive experience in leading and transforming large industrial operations at ArcelorMittal, and his recent experience as CTO of Aperam are extremely valuable to further strengthen our European operations,” the company says.

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Aperam operates four melt shops—two in Belgium, one in Brazil and another in France. The company’s recycling footprint includes about 50 ELG locations in Europe, North America and other locations and Aperam’s Recyco furnace dust and slag recycling operations.