Interseroh Turns Profit for Quarter

Interseroh SE, based in Cologne, Germany, reported a third quarter profit of 3.2 million euros (US$4.8 million), compared to profit of 56.6 million euros (US$85 million) the same time the previous year. Despite the improvement for the quarter, the company reported a loss of more than 4 million Euros for the first six months of the fiscal year.
Sales revenues in the steel and metals recycling segment were 710.8 million Euros, compared to last year’s figure of 1,368.0 million Euros. The services segment contributed 224.8 million Euros, compared to 245.6 million Euros, the raw materials segment 109.7 million Euros, previous year: EUR 186.1 million. Sales revenues for all segments totaled 18 million Euros, compared to the previous year’s figure of 27.9 million Euros.

In commentary following the report, the company noted that following slumping steel scrap prices from January until March, prices rose again in April and May and declined in June prior to increasing again in July through September. They continued to hover significantly below the levels of the same period in the previous year, however. The slight increase in demand in the second quarter continued moderately in the third quarter due to a modest global recovery in steel production.

Prices for non-ferrous metals also rose in the third quarter of the current fiscal year, but continue to fall short of prices in the comparable period of the previous year. Tonnage sold in the third quarter rose slightly. Demand from Asia was the driving force in growth in sales quantities of non-ferrous metals in both the second and third quarter.
In total, however, tonnage of steel scrap and non-ferrous metals marketed was below the 2008 level in both stock and direct sales business viewed over the nine-month period.

Interseroh was nevertheless able to significantly lower reduced working hours in the steel and metals recycling segments due to the brighter economy. In October 45.5 percent fewer employees were working reduced working hours than in January 2009.

Sales revenues in the services segment also grew during the third quarter. The main reasons for this growth are higher levels of services and paper marketing revenues in transport packaging recycling, as well as higher quantities recorded in the deposit business due to the consumption-related rise in the summer months.
The rise in volume in the total market of licensed light packaging anticipated due to the fifth amendment of the Packaging Ordinance was less significantly than calculated by operators of dual systems. Interseroh has been successful in increasing its market share in the area of sales packaging and continues to take second place in the ranking of dual systems.

Deficiencies in the enforcement of the fifth amendment of the Packaging Ordinance continue to present a challenge. Interseroh, therefore, welcomes the intentions of the enforcement authority to check the tonnages reported more closely. Together with other operators Interseroh has taken measures to increase total volumes. This includes supporting the distributors of packaging in industry and trade in implementing the Packaging Ordinance specifically and in accordance with the law in their daily operations by setting up an appropriate web site. 

Interseroh has expanded the non-regulatory business field by developing an innovative circulation system for multi-way transport boxes for fruit and vegetables. The boxes are used in the transport of fruit and vegetables along the entire supply chain - from the producer to the store - and are also utilized in presenting the goods at the retail level. A contract was entered into with a major discounter effective the beginning of fiscal 2010. Interseroh manages all the logistical processes, as well as the cleaning of the boxes.

Marketed Interseroh tonnage rose from April to June, but declined from the second to the third quarter. The reason for this was the lower volume of recovered paper in the months from July to September. Prices for recovered paper rose continuously in the three quarters of the current fiscal year. Average prices, however, for the first nine months remained significantly below the levels of the same period in the previous year.

Prices for plastics were up from the first to the second quarter and stayed at this level from July to September; they remain below the level of the comparable period of the previous year, however. Interseroh was able to drive up tonnage slightly in the third quarter, particularly in view of Asian demand.

Demand for recovered wood for material recycling was subdued in the first nine months of 2009 due to the economy, while demand for recovered wood for thermal recycling continued at a stable level. Selling prices of wood for material recycling rose moderately, while selling prices of wood for thermal recycling remained stable.