Release Date: August 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aurubis AG (AIAGF, Financial) reported a strong operating result with an EBT of EUR333 million, exceeding the previous year's earnings by 30%.
- The company successfully completed the most extensive and complex maintenance shutdown in its history at the Hamburg site, investing around EUR0.25 billion.
- Aurubis AG (AIAGF) experienced a significantly higher metal result, high demand for cathodes and wire rod, and lower energy costs.
- The company maintained a positive net cash flow of EUR52 million despite increased working capital due to the Hamburg shutdown.
- Aurubis AG (AIAGF) confirmed its forecast range for the current fiscal year at EUR380 million to EUR480 million operating EBT, indicating confidence in its financial outlook.
Negative Points
- The company faced lower sulfuric acid revenues and lower income from refining charges, which impacted overall earnings.
- Operating ROCE slightly decreased to 11.1% from 11.2% in the first nine months of the previous year due to increased capital employed and negative financial impacts from criminal activities.
- The multi-metal recycling segment saw a decline in operating EBT to EUR109 million from EUR143 million in the previous year due to lower refining charges and reduced throughput of recycling materials.
- Aurubis AG (AIAGF) experienced increased costs, including a 6% rise in personnel costs and other operating expenses, partly due to legal and consultancy fees related to criminal activities.
- The sulfuric acid market, while showing positive momentum, still remained below the previous year's high pricing levels, affecting revenue potential.
Q & A Highlights
Q: Can you provide insights on the current state and future outlook of TC/RCs and the concentrate book?
A: Roland Harings, CEO, explained that Aurubis has strong earnings pillars beyond TC/RCs, including recycling and products. The company is well-supplied with concentrates for the first quarter of fiscal year '24-'25 at similar conditions to the current year. Aurubis is in ongoing discussions with suppliers and has a mix of contracts, some based on benchmarks and others not. Harings believes the market overreacted with low spot prices and expects reasonable TC/RC levels going forward.
Q: Are there ramp-up challenges at the Hamburg plant following the maintenance shutdown?
A: Harings clarified that the ramp-up at Hamburg was executed as planned, with no connection to sulfuric acid quality issues reported in the press. The company met its market commitments, and the EBT outlook for the fiscal year remains in the upper part of the EUR380 million to EUR480 million range.
Q: What is the current state of the recycling market, particularly regarding scrap availability and refining charges?
A: Harings noted significant volatility in the scrap market due to high metal prices and arbitrage opportunities. The CRU number for scrap number two is EUR380 per tonne, indicating decent market conditions. Aurubis is well-supplied with scrap at normal price levels.
Q: How are ramp-up costs at the Richmond plant impacting fiscal Q3 results, and what is the guidance for the current fiscal year?
A: The ramp-up costs at Richmond impacted fiscal Q3 results by EUR16 million, with an additional EUR12 million expected for the current quarter. The total ramp-up impact for the fiscal year is guided at EUR28 million.
Q: What is the expected maintenance CapEx for Aurubis once the Richmond plant is fully ramped up?
A: Harings stated that Aurubis does not disclose maintenance CapEx per plant, but as a general industry guideline, 3% of invested capital is a good orientation. For the entire company, maintenance CapEx is about EUR200 million per year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
