Results 3 Months 2013/14: Slightly negative quarterly results at Aurubis
Hamburg | Thursday, February 13, 2014
Aurubis AG generated operating earnings before taxes (EBT) of € -2.5 million in the first quarter of fiscal year 2013/14. The result after the first quarter of the previous fiscal year was € 140 million, which included positive extraordinary effects of € 65 million.
The main factors that impacted earnings included the large-scale maintenance and repair shutdown in the Hamburg smelter – which affected throughput and production volumes accordingly – and the weak copper scrap and sulfuric acid markets. Restructuring expenses in Business Line Flat Rolled Products and a lower metal yield with lower metal prices also affected the results.
Peter Willbrandt, Chairman of the Aurubis Executive Board, summarized the situation:
We had expected a relatively weak first quarter. However, earnings were strained by certain factors whose effects couldn’t be predicted.
Developments in the markets relevant to Aurubis varied: while the market for copper concentrates was positive, copper scrap and sulfuric acid markets remained weak, which was reflected in a significant decline in processing fees for copper scrap and sulfuric acid prices compared to the previous year. The availability of complex recycling materials was good, while cathode markets were affected by physical shortages.
Taking the usual seasonal effects into account, there was a recovery trend on the sales markets for copper products. For example, rod output rose by over 20 % yearon-year. The markets for flat rolled products tended to move sideways.
Lower metal prices in particular caused the Aurubis Group’s revenues to decrease to € 2,804 million in the first quarter of fiscal year 2013/14 (€ 3,395 million in the previous year). The average copper price during the quarter was 10 % lower than the previous year. The gold price fell by 26 %, the silver price by 36 %.
IFRS earnings before taxes (EBT) amounted to € -73 million (€ 13 million in the previous year). In contrast to operating earnings, IFRS earnings include valuation effects due to copper price fluctuations and other factors. Therefore, the operating earnings are decisive for Aurubis in assessing the business performance and managing the company.
The outlook for the rest of fiscal year 2013/14 is positive overall now that most of the optimizations following the large-scale shutdown in Hamburg have been completed.
A good supply and high treatment charges are still expected in the copper concentrate market. We anticipate a slight improvement in the copper scrap markets. There is a relative shortage of copper cathodes, which should fundamentally support copper prices. We expect our copper product sales to increase due to more stable demand.
There is no significant improvement in sight on the sulfuric acid market.
There are uncertainties about the economic trend in the emerging economies, especially China, and their influence on the markets and metal prices. Moreover, earnings will continue to be influenced by the restructuring of Business Line Flat Rolled Products.
“Overall, we expect our earnings level in the current fiscal year to exceed the previous year,” Peter Willbrandt concluded.
You can find the complete report on the first three months of fiscal year 2013/14 at www.aurubis.com.