Aurubis: Very good results in the first quarter of fiscal year 2011/12
Hamburg, 14 February 2012 – Aurubis AG generated earnings before taxes (EBT) of € 190 million (€ 135 million in the prior year 2010/11) in the first quarter of fiscal year 2011/12 on the basis of IFRS. The operating EBT amounts to € 86 million and is therefore significantly up on the comparable prior-year quarter (EBT € -21 million), which was burdened by extraordinary effects.
Aurubis AG’s (Aurubis) revenues increased to € 3,151 million (€ 2,732 million in the prior year) despite a lower average copper price of US$ 7,489/t (US$ 8,634/t in the prior year). The increase in revenues is due in particular to the integration of Luvata. Furthermore, higher precious metal prices overcompensated for the declining copper prices. Earnings before taxes (IFRS) rose from € 135 million in the prior year to € 190 million in the current fiscal year. At € 86 million, operating earnings before taxes improved considerably compared to the prior-year quarter
(€ -21 million), which was burdened by extraordinary effects. Apart from the good situation of significant markets, highlights included the increased concentrate throughput and the higher sulphuric acid output.
Net cash flow is at a low level, which is typical in the first quarter. At € 19 million, it nevertheless rose distinctly compared to the prior year (€ -137 million).
The copper market was influenced by the ongoing financial crisis in Europe, the economic trend and seasonal factors. The fundamental situation nonetheless supported the copper price well overall. The copper price trend was volatile, but the effects were not serious.
The average settlement copper price for the quarter was US$ 7,489/t on the LME (US$ 8,634/t in the prior years’ quarter). The closing price for the quarter under review was US$ 7,554/t. Gold and silver were in demand on the markets again as investments to hedge risks.
The supply situation for copper concentrates and recycling materials for our plants was good. Mine strikes in Indonesia and South America had an effect on the spot market for copper concentrates. Treatment charges in spot transactions fell to new lows as a result, but this did not directly affect Aurubis. On the copper scrap market, spot transactions suffered due to decreasing copper prices. Aurubis was barely affected by this either, as we were already well stocked. Other recycling materials also remained readily available. Demand for sulphuric acid was good at first but then faced initial demand decreases.
In addition to continued cautious scheduling activities in customer industries, markets for copper products were also subject to seasonal influences at the end of the calendar year. Demand weakened considerably and we recorded significantly lower sales volumes.
Result Business Units
|1st quarter 11/12||1st quarter 10/11||Difference in %|
|BU Primary Copper|
|Concentrate throughput||t||529,000||424,000||+ 25%|
|Scrap throughput||t||43,000||56,000||- 23%|
|Sulphuric acid output||t||510,000||416,000||+ 23%|
|Cathode output||t||232,000||225,000||+ 3%|
|BU Recycling/Precious Metals|
|Scrap input||t||27,000||35,000||- 20%|
|KRS throughput||t||76,000||66,000||+ 15%|
|Cathode output||t||51,000||53,000||- 4%|
|BU Copper Products|
|Wire rod output||t||156,000||198,000||- 21%|
|Continuous cast shapes output||t||37,000||54,000||- 31%|
|Flat copper products||t||46,000||10,000||-|
The operating result in the first three months of the fiscal year was determined first and foremost by the following factors compared to the prior-year period:
» The copper concentrate throughput was well above the throughput level of the first quarter of the prior year, which was lower due to standstills. Higher treatment charges were collected at the same time.
» Higher sulphuric acid prices with higher sales volumes compared to the prior-year quarter had a distinctly positive effect on consolidated earnings.
» Higher refining charges in copper scrap processing and increasing input quantities of recycling materials led to positive contributions to earnings.
» Uncertainties about the overall economic trend were reflected in declining sales volumes in the copper products sector.
» There was a good metal yield with higher precious metal prices.
» In contrast to the first quarter of the prior year, the first quarter of the current fiscal year was not burdened by negative extraordinary effects from the valuation of metal inventories.
The Aurubis Group had a total of 6,304 employees at the end of the first quarter (4,850 in the prior year). The increase in the number of employees is due in particular to the integration of the former Luvata Rolled Products Division and various capital expenditure measures for expansion focused on the Hamburg and Lünen sites.
The Aurubis Group employees are spread out over the following countries: Germany (3,554), Bulgaria: (812), USA (639), Belgium (475), Sweden (223), Finland (194), Netherlands (158), Italy (133), Switzerland (46), England (28), Slovakia (14), China (9), France (3), Singapore (3), Thailand (2), Korea (2), Russia (2), Japan (2), Turkey (2), Spain (1), Taiwan (1) and Vietnam (1). Group-wide, 56 % of the workforce is thus employed in Germany and 44 % at other locations worldwide.
Operating and Strategic Measures for Corporate Development
Cost reduction and continuous improvement
Maintaining a competitive cost position is crucial in order to ensure Aurubis’ competiveness on the international raw material procurement markets and the sales markets for copper products. Various ongoing products are targeted at cost reduction and improving the Group’s competitive advantage. The efficiency and productivity improvement project at the Pirdop site in Bulgaria was successfully transferred to a sustainable, continuous improvement programme.
As part of the strategic initiative to expand the copper product sector, the integration of the new entities into the Aurubis Group is the focus of our strategy implementation following the acquisition of Luvata’s Rolled Products Division on 1 September 2011. We already achieved important milestones in the first quarter of the fiscal year. Last but not least, we have implemented the new management organisation and introduced measures to optimise the production structure. For example, teams have worked together with the sites to identify synergy potential and start implementation measures. Furthermore, we intend to close the production site in Finspång (Sweden) in the next two years and relocate production to other Group sites.
Concentration in the complex profiles sector
In order to increase profitability in the complex profiles sector, we intend to concentrate production at just one site. The plan is to move the plants in Yverdon-Les-Bains (Switzerland) to Olen (Belgium). The Swiss site is not profitable due mainly to high logistics costs, factor costs and not least the unfavourable trend in the €/CHF exchange rate. A sales office with seven employees will remain, and the other 35 employees will be offered jobs in the Group.
We also expect a good situation for our procurement markets for the rest of the fiscal year. Overall, we view the copper market as well supported despite economic uncertainties and expect volatile yet high ongoing copper prices. On the sales markets, especially for sulphuric acid and copper products, we are confronted with the effects of subdued economic expectations and doubts regarding the further development of the financial crisis. This will be reflected in the future business trend. Currently, we do not expect the results of the very good first quarter to continue to this extent. Nevertheless, we anticipate a satisfactory annual result overall on the basis of this good quarterly result.
The complete Interim Report for the first three months of fiscal year 2011/12 can be found at www.aurubis.com.
Overview of Group Key Figures (IFRS)
This information contains forward-looking statements based on current assumptions and forecasts. Various known and unknown risks, uncertainties and other factors could have the impact that the actual future results, financial situation or developments differ from the estimates given here. We assume no liability to update forward-looking statements.
Aurubis is the leading integrated copper group and the world’s largest copper recycler. We produce some 1 million tonnes of copper cathodes each year and from them a variety of copper products. Aurubis has about 6,300 employees, 18 production sites in Europe and the USA and an extensive service and sales system for copper products in Europe, Asia and North America.
Thanks to our wide range of services, we rank among the global leaders in our industry. Our core business is the production of marketable copper cathodes from copper concentrates, copper scrap and recycled raw materials. These are processed within the Group into continuous cast wire rod, shapes, rolled products and strips as well as special wire made of copper and copper alloys. Precious metals and a number of other products, such as sulphuric acid and iron silicate, round off our product portfolio.
Customers of the Aurubis Group include companies in the copper semis industry, the electrical engineering, electronics and chemical industries as well as suppliers of the renewable energies, construction and automotive sectors.
The Aurubis Group is oriented to growth and to increasing corporate value. The main focus of our strategy is on strengthening our business, utilising growth opportunities and practising a responsible attitude when dealing with people and handling resources and the environment.
Aurubis shares are part of the Prime Standard Segment of the Deutsche Börse and are listed in the MDAX, the European Stoxx 600 and the Global Challenges Index (GCX).
Further information at www.aurubis.com
Head of Group Communications
Tel. +49 40 7883-3053
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