An online article prepared by the Times of London says the parent company of United Kingdom-based European Metal Recycling Ltd. (EMR) experienced a steep revenue drop in 2015 and also recorded an operating loss.
According to the Times, EMR’s parent company, Ausurus Group, recorded £2.5 billion ($3.26 billion) in sales in 2014, but that figure plunged to just £2 billion ($2.61 billion) in 2015, which the firm “blamed on crashing metal prices.” As well, Ausurus went from a £23 million ($30 million) profit in 2014 to a £65 million ($84.9 million) pretax loss in 2015.
The news article cites Ausurus and EMR as pointing to declining ferrous scrap prices as a foremost challenge, blaming the condition on “the global economic slowdown and excess production in China.”
EMR and Ausurus also say, according to the Times, that as a reaction to the market, Ausurus slashed its level of debt nearly in half in order to keep the debt-to-profit ratio at a “prudent” level. EMR also says its profitability rebounded in the first half of 2016.
Regarding the Brexit decision, Ausurus has reportedly indicated the vote by U.K. citizens to leave the European Union could hurt the firm, if a weaker economy generates less scrap.
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