Aurubis posts 'very respectable results' given the inflationary environment

Aurubis AG, headquartered in Hamburg, Germany, has reported its earnings for the first quarter of its 2022/23 fiscal year, which ended Dec. 31, 2022. The company’s operating earnings before taxes (operating EBT) totaled 125 million euros, or $134 million, which is less than the quarterly results for the previous year of 164 million euros, or $175.8 million. Aurubis attributes the decline to the impact of inflation and increased energy prices.

“We started the new fiscal year with very respectable results—especially when you consider the high inflation and increased energy costs,” Aurubis CEO Roland Harings says. “The ongoing high demand for our products clearly shows: the world needs Aurubis metals. They are essential to transforming our industry and society and moving in a more sustainable direction.

"For the 2022/23 fiscal year as a whole, we expect earnings at the upper end of the forecast range," he adds. 

For the recently completed quarter, Aurubis reports operating EBT of 35 million euros, or $37.5 million, for its Multimetal Recycling segment. This is nearly 65 percent lower than the previous year’s 83 million euros, or $89 million. However, with 108 million euros, or $115.8 million, in the Custom Smelting & Products segment, Aurubis achieved a roughly 15 percent higher operating EBT than in the same quarter of the previous year (94 million euros, or $100.8 million). The company’s International Financial Reporting Standards EBT amounted to 71 million euros ($76.1) compared with 405 million euros ($434.2 million) in the previous year.

In the reporting period, operating return on capital employed (ROCE) surpassed the Aurubis target of 15 percent, totaling 16.3 percent for the quarter compared with 17.9 percent in the first quarter of the previous year.

In the first quarter of 2022/23, Aurubis’ smelter network’s operating performance was driven by the results from its Bulgarian Pirdop site, according to the company. Aurubis adds that its copper products were in high demand, allowing it to achieve higher product revenues through price increases.

Compared with the previous year, market conditions for copper scrap and sulfuric acid proved less attractive in the first quarter of 2022/23, which had a dampening effect on results, Aurubis says. Its Metal result also was lower in light of the input materials used.

Aurubis reports that it remains debt free with an operating equity ratio of 54.5 percent at the end of the first quarter. The company says its financial strength forms the basis of the accelerated implementation of its strategic agenda, comprising approved growth projects with a volume of around 1 billion euros, $107.2 billion, that will be realized over the next three to four years. They will contribute roughly 230 million euros ($246.6 million) to the group’s operating results starting in 2026/27. Additional growth projects are being planned for the medium term and are slated for approval this year once they have reached the appropriate state of maturity.

Net cash flow, which fluctuated strongly during the year, according to Aurubis, amounted to negative 64 million euros (down from negative 85 million euros in the previous year), which was primarily because of high inventories in the recently completed quarter.

For fiscal year 2022/23, Aurubis says it anticipates an operating EBT between 400 million and 500 million euros ($428.8 million and $536 million) and an operating ROCE between 11 percent and 15 percent.

The company adds that for the rest of the year it expects a positive effect on its annual results because of the following factors: more growth in global copper demand, a roughly 35 percent increase in treatment and refining charges for copper concentrates, a significantly higher Aurubis copper premium and greater demand for copper products.