The Aurubis Group generated operating earnings before taxes (EBT) of € 148 million in the first nine months of fiscal year 2015/16 (previous year: € 262 million). The operating return on capital employed (ROCE; rolling EBIT for the last four quarters) was 11.2 %
(previous year: 18.7 %). Both of these KPIs are below the previous year, as announced, but are at the level of market expectations.
Earnings were positively influenced by improved treatment and refining charges for copper concentrates due to an optimized input mix, continued high sales of rod and shapes and the ongoing strength of the US dollar.
In contrast, the nearly eight-week large-scale shutdown in Pirdop, Bulgaria, which was very successful and garnered global attention in the industry, had an adverse impact. A total of 52 companies and roughly 1,200 people participated in this maintenance and repair shutdown, the largest since 1986. The capital expenditure volume amounted to € 44 million, and eleven facilities were replaced in 54 days.
Continued weakness in the copper scrap markets, sulfuric acid markets impacted by an overcapacity as well as the lower cathode premium this year all strained the results as well.
“Having started at Aurubis in early July, I was pleased to hear that we carried out our shutdown in Pirdop in Q3 as scheduled and that our employees completed this very ambitious task so successfully. This was one reason why our operating EBT fulfilled market expectations in this quarter,” commented Jürgen Schachler, Aurubis CEO since July 1, 2016, regarding the results.
The prior-year earnings included positive extraordinary effects of about € 32 million, which mainly resulted from low precious metal inventories at the end of the third quarter.
The Aurubis Group’s revenues in the first three quarters of fiscal year 2015/16 reached € 7,076 million (previous year: € 8,467 million). The reduction in revenues is primarily due to lower copper prices.
We continue to expect treatment and refining charges to be at a good level. In the case of sulfuric acid revenues, we currently don’t expect prices to recover. We don’t see a sustainable recovery of the copper scrap markets at the moment, either. Increasing metal prices could have a positive impact in this area, however.
For rod and shapes products, we expect stable demand at the level of the previous year. On the markets for strip products, we also anticipate stable demand at a low level in the key market segments.
Since a large portion of our income is based on the US dollar, we continue to expect positive earnings contributions, compared to the previous year, due to the strong US dollar.
The improvement projects that we have initiated are contributing to earnings in the current fiscal year; they will, however, only have a significant positive impact in future fiscal years.
“Accordingly, we can confirm our forecast for the entire year: compared to the record result of the previous year, we will generate a significantly lower but good result in fiscal year 2015/16,” Erwin Faust, CFO of Aurubis, summarized the fiscal year outlook.
You can find the complete report on the first nine months of fiscal year 2015/16, including the segment reporting, at
IFRS earnings before taxes for the first nine months amounted to € 98 million (previous year: € 245 million). In contrast to operating earnings, IFRS earnings include measurement 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.