Aurubis reports uptick in earnings

Aurubis reports uptick in earnings

German copper company sees €5 million earnings increase in the first half of its current fiscal year.

May 17, 2017
RTGE Staff
Financial Nonferrous

Hamburg, Germany-based Aurubis Group has reported operating earnings before taxes (EBT) of €118 million ($131 million) in the first half of its fiscal year 2016/17, a €5 million ($5.5 million) uptick over the previous fiscal year’s first-half earnings of € 113 million ($125 million).


“The result corresponds to our expectations,” says Jürgen Schachler, board chairman of Aurubis AG. “The scrap markets have significantly improved and recycling has made a good contribution to earnings. Our expertise in the processing of complex raw materials makes us less dependent on the currently lower smelting and refining charges in the concentrate market. At the same time, the processing of these raw materials facilitates higher margins for us,” he adds.


Aurubis says its first-half results were “driven primarily by good raw material markets, particularly in the recycling area. Higher metal prices have led to a very good supply of copper scrap with correspondingly high refining charges.”


The company also says increased demand for flat rolled products led to higher sales in shapes, and the strong United States dollar supported its results “since a significant part of Aurubis’ income is U.S. dollar-based.”


In concentrate processing, Aurubis says it was able to achieve throughput “at the high level of the previous year despite [a] legally mandated shutdown” at its Hamburg facility in October and November 2016. The company’s smelting and refining charges of used concentrates were high during the fiscal second quarter, “which was primarily attributable to the high proportion of complex materials,” says the company.


The copper cathode premium, which Aurubis reduced by $6 (€5.4) to $86 (€77.5) for calendar year 2017, also affected its results. The company further says demand for copper wire rod remained below expectations because of “temporary inventory adjustments” by some of its cable customers.


Aurubis Group’s revenue was €5.428 billion ($6 billion) in the first half of the current fiscal year, marking a €703 million ($780 million) increase from the previous year’s level. The company cites higher metal prices as the primary reason for the boost.

The company also presented its “Vision 2025” plan at its annual general meeting in March 2016. Along with its core metal, copper, Aurubis says it intends to produce more and varied metals in the future and is “developing a strategy for achieving its vision of being a multi-metal group” that will be communicated at the end of the 2017 calendar year.


Aurubis says it does not expect “far-reaching changes either in the raw material or product markets by the end of fiscal year 2016/17.” In the copper scrap market, the group says it expects “a sustained high supply with good refining charges in the coming months. However, declining metal prices in the short term could result in a tightening of the market with subsequently lower refining charges.”


“We expect stable raw material and product markets for the rest of the year,” says Schachler. “We therefore confirm our forecast for the full year: We are assuming significantly higher operating earnings before taxes and a slightly higher operating return on capital employed,” he adds.