- Operating EBT at € 31 million
- Planned shutdown successfully implemented in Hamburg leads to € 34 million impact on result
- Market situation remains challenging during fiscal year
The Aurubis Group generated operating earnings before taxes (EBT) of € 31 million in the first three months of fiscal year 2019/20 (previous year: € 40 million). This result meets the capital market’s expectations.
EBT was significantly influenced by a planned maintenance shutdown at the Hamburg plant, which the company carried out in October and November of last year. “We successfully carried out the maintenance shutdown in Hamburg in the planned timeframe and budget. All of the planned investments and measures were accomplished. We therefore expect a considerable improvement in plant availability and a higher concentrate throughput,” Aurubis AG Executive Board Chairman Roland Harings positively summed up the situation. The shutdown had a roughly € 34 million impact on the Q1 result. Q1 of the previous year was strained in the amount of approximately € 25 million due to unplanned shutdowns.
Lower sulfuric acid revenues also affected the most recent quarterly result since less sulfuric acid was produced due to the shutdown. Significantly weaker demand for shapes and flat rolled products also weighed on the result.
A higher metal gain with increased precious metal prices on the one hand, and considerably higher refining charges for copper scrap on the other, led to positive effects in Q1.
Aurubis generated revenues of € 2,709 million during the first three months of the current fiscal year (previous year: € 2,614 million). This development was primarily due to higher precious metal prices. Operating ROCE (taking the operating EBIT of the last four quarters into consideration) declined from 11.3 % in Q1 of the previous fiscal year to 7.6 % due to the lower results in the past four quarters. The net cash flow as at the end of Q1 2019/20 improved significantly, to € -93 million, compared to Q1 2018/19 (€ -308 million). In the first three months of the past fiscal year, the net cash flow was influenced by preparations for the planned shutdowns in 2018/19 and effects from unplanned shutdowns.
Aurubis achieved EBT of € 93 million from continuing operations on an IFRS basis (previous year: € 12 million).*
Aurubis’ market environment continues to be challenging. Generally speaking, the economic trend remains to be seen. This is due in part to the impacts of coronavirus, which can’t be predicted at the moment.
The company anticipates that treatment and refining charges for copper concentrates in particular will remain significantly below the previous year in light of the current benchmark of US$ 62/t (6.2 cents/lb). At the same time, the company is confident that it will have a good supply of copper concentrates. In contrast to concentrate TC/RCs, Aurubis expects copper scrap refining charges to remain at a good level with a good supply situation.
Apart from the planned shutdown already carried out in Hamburg, two additional planned, legally mandated shutdowns are scheduled at the Lünen site for April and September. According to current plans, they will have a roughly € 11 million impact on the result.
When it comes to sales of copper intermediates, Aurubis anticipates stable demand overall, which will nevertheless be at a fairly low level for copper shapes. Aurubis set the copper premium at US$ 96/t for calendar year 2020, the level of the previous year. For the most part, the company expects to be able to implement this premium for its products.
Sulfuric acid sales, which are generally difficult to forecast, indicate stable demand with constant prices for Q2 of fiscal year 2019/20.
The outlook for the current fiscal year is unchanged, as Roland Harings explained: “Even with the challenging conditions on our markets at the moment, we can confirm our forecast for the fiscal year.”
* Because the IFRS result includes measurement effects due to metal price fluctuations and other factors, Aurubis discloses an operating result (EBT) that differs from the IFRS result. The operating result largely eliminates the effects of metal price fluctuations and thus allows for a more realistic assessment of the business performance. Operating EBT is used for control purposes within the Group.
Segment FRP will continue to be classified as discontinued operations pursuant to IFRS 5. The intended sale of the segment does not affect the operating reporting, however.
The complete Quarterly Report First 3 Months 2019/20 is available here.