Befesa reports stable Q1 2023 profits

Luxembourg-based steel electric arc furnace (EAF) dust and aluminum byproducts recycler Befesa S.A. says it achieved relatively stable earnings before interest, taxes, depreciation and amortization (EBITDA) in this year’s first quarter compared with the prior quarter, despite what it calls “a challenging environment with unfavorable zinc treatment charge (TC) and coke prices.”

The company’s first quarter EBITDA figure of 50.1 million euros ($55.4 million) was down 1.2 percent compared with a 50.7 million euros ($56.1 million) figure from the prior quarter. Its first quarter 2023 total revenue, meanwhile, increased by 9 percent compared with the prior quarter and 23 percent year on year, with Befesa saying the increases were driven mainly by [its] United States operations.

Despite the revenue increase, the metals recycler says its volumes and capacity utilization levels were lower overall year on year. Its EAF steel dust throughput decreased by 8 percent quarter on quarter and 19 percent year on year, with Befesa citing in part the impact of the earthquakes in Turkey.

Befesa characterizes aluminum salt slags and spent potlining recycling volumes as stable quarter on quarter but decreasing by 6 percent year on year. The firm says its aluminum byproducts recycling plant in Hanover, Germany, was in the process of ramping up (after completing repairs from a late 2021 fire) during this year’s first quarter.

Metals pricing also played a role in Befesa’s first quarter 2023 results. The company says London Metal Exchange (LME) zinc market prices were “approximately stable” quarter on quarter, but decreased by 13 percent—or nearly $443 per metric ton—year on year. The company says losses from the zinc decline were “partially offset by higher zinc hedging prices.” Aluminum alloy market prices also were stable quarter on quarter but down 12 percent year on year.

Befesa says it “continues to rigorously execute its expansion projects while closely monitoring the development of energy and base metal prices, especially coke and zinc.” It lists a refurbishment project at its Palmerton, Pennsylvania, plant as a planned capital expenditure project, saying the facility would then be poised “to benefit from and support the incremental EAF steel dust volumes expected in the U.S. market over the coming years.”

The firm says its full-year 2023 EBITDA could range from 200 million euros ($221.3 million) to 230 million euros ($254.5 million), meaning that figure could fall by up to 7 percent or rise by up to 7 percent compared with 2022.

“We continue to rigorously execute our expansion projects, focusing on the U.S. zinc refining and recycling operations and China, which will serve us well over the coming years," Befesa Executive Chair Javier Molina says. "We are passionate about serving our customers globally as a vital player in the circular economy.”