Aurubis remains in robust financial condition
Hamburg | Thursday, March 19, 2015
Aurubis remains in robust financial condition / More than 60 improvement projects started / Resolution for dividend payment of € 1.00 per share passed at Annual General Meeting
“The company remains in robust financial condition,” stated Chief Executive Officer Dr. Bernd Drouven to about 1,400 share-holders and guests at the Aurubis AG Annual General Meeting 2013/14 in Hamburg on Thursday. Looking back, he highlighted the significantly improved operating earnings before taxes (EBT) of € 138 million (previous year: € 114 million), which nevertheless didn’t fulfill the initial expectations.
From a macroeconomic perspective, the recovery in the US and a stronger US$ as well as the development of the European rod and shapes markets in the product sector had a positive effect on earnings. The extensive maintenance shutdown in primary copper production in Hamburg in September and October 2013 strained the results. The production restart and the ramp-up to full capacity extended into the second fiscal year quarter. The sulfuric acid markets initially worsened compared to the previous year but then stabilized during the third quarter, showing positive tendencies at the end of the fiscal year. The trend on the copper scrap markets hit a low in the second and third quarters and only improved at the end of the fiscal year, which didn’t impact earnings.
The return on capital employed (ROCE) is an important KPI in addition to operating EBT. It improved to 8.5 %, which was still significantly below the Group target of 15 %. The equity ratio was 44 %.
Aurubis’ share price was affected by the weak results of operations during the last fiscal year and lost about 13 %. In contrast, the development in the first quarter of the new fiscal year 2014/15 was very positive.
Because the company is not satisfied with what it has achieved and wants to be a step ahead of the competition, additional measures have been implemented. A project to improve the results started at the Hamburg and Lünen sites in September 2014. The project is already supposed to make a contribution to earnings in the low double-digit millions during the current fiscal year.
Additional key issues include sustainability in harmony with the economy, ecology and social aspects, as well as energy:
Aurubis published a comprehensive Sustainability Strategy last year. One of the main action areas is responsibility in the supply chain. Furthermore, Aurubis also committed to following an additional social standard, the UN Global Compact, the world’s largest initiative for responsible corporate governance.
Addressing the topics of energy and the German Renewable Energies Act (known as the EEG), Dr. Drouven explained:
We expect a constant cost burden at the current level. However, it is important for our planning security that the regulations ensuring extensive exemptions from the EEG reallocation charge remain in place in the long term. We therefore count on politicians’ promise that the special compensation scheme will not be up for discussion again.
Referring to the results of the first quarter of the new fiscal year 2014/15, which were published in February, the CEO mentioned the positive external market conditions such as higher treatment charges for copper concentrates, stable sales prices for sulfuric acid, the good supply on the copper scrap markets with stable refining charges and the good level of the copper product markets. Operating EBT rose to € 39 million compared to € -3 million in the previous year. Return on capital employed (ROCE) reached 11 % following 0.3 % in the previous year. The Group is therefore on its way to reaching the target of 15 %.
Under the strategy theme “Step Up”, more than 60 projects were started internally to improve different areas. Among other measures, Dr. Drouven highlighted the organizational project, which includes the implementation of corporate Supply Chain Management.
With regards to the outlook, Dr. Drouven said that there were already some clearly positive market signals for the current fiscal year. Global copper demand continues to have a solid foundation. In China, the country with the largest copper demand worldwide, the lower copper prices and a number of extensive infrastructure projects could lead to good ongoing demand. Aurubis had a positive impression of the negotiations for long-term European sales contracts for 2015, and the good economic development in the US is also having an impact.
“All in all, we expect a considerably higher operating EBT and a slightly higher ROCE for fiscal year 2014/15 compared to the previous year,” Dr. Drouven sum-marized.
The attendees of the Annual General Meeting accepted the recommendation of the Supervisory Board and the Executive Board to issue a dividend of € 1.00 per share (previous year: € 1.10) to the shareholders. The dividend yield is 2.6 % at a fiscal year closing price of € 39.16.
All of the other proposals that were put to a vote were passed with a large majority at the Annual General Meeting as well.
About 61.71 % of the share capital with voting rights was present at this year’s Annual General Meeting.
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 develop-ments differ from the estimates given here. We assume no liability to update forward-looking statements.