Aurubis sees earnings increase in Q1 of 2024/25 fiscal year

Aurubis AG, headquartered in Hamburg, Germany, has reported operating earnings before taxes (EBT) of 130 million euros ($134.8 million) for the first three months of its fiscal year 2024/25. That figure compares with 111 million euros ($115.1 million) for the first quarter of the company’s 2023/24 fiscal year.

In its Multimetal Recycling (MMR) segment, Aurubis’ operating EBT totaled 27 million euros ($28 million) compared with 29 million euros ($30.1 million) for the same period last year, while its Custom Smelting & Products (CSP) segment posted 125 million euros ($129.7 million) in EBT compared with 107 million euros ($111 million) in the previous year. The group’s operating return on capital employed, or ROCE, increased to 11.7 percent from 9.7 percent as of its Dec. 31, 2024, reporting date. Consolidated EBT totaled 339 million euros )$352.6 million), up from 72 million euros ($74.7 million) the previous year.

The MMR segment comprises the group’s recycling activities processing copper scrap, organic and inorganic raw materials containing meta, and industrial residues. The segment includes the recycling activities at its sites in Lünen, Germany; Olen and Beerse, Belgium; and Berango, Spain. The Aurubis Richmond secondary smelter in Georgia in the U.S. is included in this segment. Aurubis announced the opening of that facility in September of last year, though it will not begin melting metal until the second quarter of this year. The company plans to provide a long-term sustainable domestic home for exports that currently go to Southeast Asia.

Aurubis' recycling sites reported a 26 percent year-over-year increase in throughput of copper scrap and blister copper in the first quarter.

Its CSP segment comprises the production facilities for processing copper concentrates as well as for manufacturing and marketing standard and specialty products, such as cathodes, wire rod, continuous cast shapes, strip products, sulfuric acid and iron silicate. The CSP segment also is responsible for precious metal production. The sites in Hamburg and Pirdop, Bulgaria, manufacture copper cathodes that along with the copper cathodes produced by MMR are processed further into wire rod and continuous cast shapes at the Hamburg; Olen; Emmerich, Germany; and Avellino, Italy, sites. The Stolberg, Germany, and Pori, Finland, sites produce flat-rolled products and specialty wire products. The Buffalo, New York, site contributed to the segment’s earnings in the previous year until it was sold to fellow German-based company Wieland Aug. 30, 2024.

The company attributes the higher EBT to higher metal prices, considerably increased sulfuric acid revenues, robust earnings from copper product sales and lower costs, which more than compensated for a year-over-year decline in treatment and refining charges with lower concentrate throughput, a mild decline in earnings from the processing of recycling materials and increased depreciation and amortization and personnel expenses related to investment in growth.

“The robust operating result of the first three months of the current fiscal year is another example of how Aurubis is continuing to build on its success. Our metals are the key to the energy and mobility transition,” Aurubis CEO Toralf Haag says. “Our cash flow developed positively despite intense investment in our international smelter network. This endorses our solid business model, successful even in macroeconomically challenging times.”

Key strategic growth milestones

Aurubis’ strategic goal is to continue solidifying and expanding its position as one of the most efficient and sustainable multimetal producers worldwide.

The company says it has has made significant progress as by the end of the first quarter of its 2024/25 fiscal year, roughly 1 billion euros ($1.04 billion) of the 1.7 billion euros ($1.76 billion) total investment approved for strategic projects had been invested. These projects are expected to generate an additional EBITDA, or earnings before interest, taxes, depreciation and amortization, contribution of 260 million euros annually, according to the company.

The company has continued to execute its growth strategy, having opened a new recycling plant at the Aurubis Olen site in Belgium. The new facility uses a hydrometallurgical process to recover nickel and copper, enabling Aurubis to keep even more strategically relevant metals in the loop for European industry. At the beginning of January, the company also celebrated the symbolic launch of the Industrial Heat expansion at its Hamburg site. In the future, Aurubis will provide up to 28,000 Hamburg households with carbon-neutral heat, avoiding up to 120,000 t of CO2 emissions.

Outlook

Aurubis expects demand for copper products and the metals the company produces to remain high.

When it comes to scrap, the company says, “The markets for copper scrap and other recycling materials are short-term oriented and depend on a variety of factors that are difficult to forecast, such as metal prices and collection activities in the recycling industry. Overall, we expect a satisfactory supply of copper scrap. When it comes to other recycling materials in Europe, we continue to anticipate a sufficient supply. Our broad market position and diversified supplier network absorb any possible supply risks.”

The company notes that various production shortages in the global mining industry arising from technical disruptions, weather conditions, strikes, political interventions and logistical issues mean only slight growth is expected in copper mine production.

“This stands in contrast to the capacity growth anticipated in the global smelting industry, which will exceed the global copper mining industry’s growth," it says. "Overall, CRU and WoodMackenzie anticipate a slight deficit in the copper concentrate market in calendar year 2025.”

Aurubis also expects stable concentrate supply in 2025, citing its position in the market and long-term contract structure, noting that at its primary sites in Hamburg and Pirdop it is supplied with concentrates into Q3 of its current fiscal year.

For the current 2024/25 fiscal year, it anticipates an operating EBT of between 300 million and 400 million euros ($311 million and $415 million) and foresees an operating ROCE of between 7 percent and 11 percent.