Aurubis has reported a strong start to its fiscal year, fueled by rising copper and sulfuric acid prices and reduced costs, leading to an impressive increase in operating profit. Revenue grew by 8% to €4.2 billion, while operating profit before taxes rose by 17% to €130 million. Despite cautious projections for the year ahead due to maintenance costs and lower smelting prices, Aurubis is expanding its production capabilities with new recycling facilities in the U.S. and Belgium.
Strong Start for Aurubis in Fiscal Year
HAMBURG (dpa-AFX) – Aurubis, a leading copper producer, has kicked off the new fiscal year with remarkable success, driven by an upswing in copper and sulfuric acid prices. The company has also benefited from a decrease in costs, allowing it to more than offset the reductions in smelting and refining expenses associated with copper production. Additionally, despite increased growth investment costs, Aurubis has seen a significant boost in its operating profit before taxes for the first quarter, surpassing analysts’ expectations. In a statement released on Thursday, Toralf Haag, the president of Aurubis, expressed confidence that the company is on the right path to achieve its annual targets, which was positively received by the stock market.
Financial Performance and Future Outlook
In the first three months leading up to the end of December, the Hamburg-based company reported an impressive revenue growth of 8 percent, reaching 4.2 billion euros. The operating profit before taxes surged by 17 percent to 130 million euros compared to the same period last year. Overall, the MDax group’s earnings climbed to 99 million euros, reflecting a 10% increase from the previous year.
Looking ahead to the entire fiscal year 2024/25, Haag projects an operating profit before taxes ranging from 300 to 400 million euros, a decrease from 413 million euros the previous year. Scheduled maintenance shutdowns at the Pirdop site in Bulgaria and the Lünen facility in Germany are expected to incur a total charge of approximately 44 million euros. Analyst Christian Obst from Baader Bank notes that lower benchmark prices for smelting and refining may also impact annual profits, describing the profit outlook as cautious.
Aurubis continues to invest strategically in expanding its production capabilities, including the establishment of a new recycling plant in Richmond, USA, to capitalize on the burgeoning recycling market. The testing and startup phases of this facility are anticipated to affect profit development, as highlighted by Obst. In December, the company also inaugurated a recycling plant in Olen, Belgium.
Despite extensive investments in global smelting operations, Haag pointed out that cash flow remains robust, with net cash flows reaching 178 million euros in the first quarter, a significant turnaround from -202 million euros a year prior. Following the market opening, Aurubis shares climbed by 4.4 percent to 77.60 euros, continuing a recovery from a peak of nearly 88 euros in early December, which had dipped to around 70 euros by mid-January.
In the context of stock market activities, Dirk Rossmann, founder of the Rossmann drugstore chain, has increased his stake in Aurubis to over 10 percent, although he has no intention to influence the board’s composition. Investors are also monitoring Salzgitter AG, which holds nearly 30% of Aurubis and has received a non-binding purchase offer from GP Günter Papenburg and TSR Recycling. However, the state of Lower Saxony, as the main shareholder of Salzgitter, along with employee representatives, have expressed opposition to this offer, potentially impacting Aurubis as well.