The Supervisory Board of Aurubis AG has resolved further capital expenditure of about € 530 million. This will be used to double the processing capacity at the Aurubis Richmond recycling site in Georgia, US, and for infrastructure adjustments to the current project. Furthermore, Aurubis is investing in the CRH (Complex Recycling Hamburg) project in Hamburg to increase recycling capacity. They are also investing in an expansion of the solar park that generates electricity for the company at the Pirdop site in Bulgaria. The returns from these three projects result in an expected earnings contribution (EBIDTDA) of about € 130 million. In addition, Arubis decided to carry out a major IT modernization project involving the switch to the SAP S/4HANA platform.
"These resolutions show: We are consistently implementing our strategy 'Driving Sustainable Growth'. Aurubis is accelerating growth in recycling with the next expansion stage of our US plant. We are strengthening our core business by investing in innovative metallurgy in Hamburg to process complex secondary materials more efficiently. And we are expanding our industry leadership in sustainable multi-metal production by generating our own power using renewable energies in Bulgaria," notes Roland Harings, Chairman of the Aurubis Executive Board. "With the introduction of S/4HANA, we are also creating key conditions for automating our entire smelter network even more, leveraging efficiencies and growing further."
Doubling Recycling Capacities in Richmond
Aurubis will significantly increase its growth in the US. Currently, an Aurubis plant is under construction in Richmond, Georgia. About € 90 million in additional capital expenditure adjustments for infrastructure requirements and inflation have been approved for this plant. Further, the plant will receive a second recycling module with a capital expenditure volume of about € 250 million. This expansion stage is scheduled to start production in 2026.
The rapidly growing availability of complex recycling materials (which lies at more than 5 percent per year) can be explained by the ongoing recycling boom in the USA. It creates favorable conditions for expanding Aurubis' market position in the US.
The previous throughput volume of 90,000 tons of complex recycling materials will be raised to 180,000 tons due to the the doubling of the expansion stage. The expansion follows the highest environmental standards and enables environmentally friendly processing of the input materials. In addition, Aurubis is creating about 80 new jobs in Richmond and will employ about 200 people at the site after the completion of both recycling modules.
The US investments will be highly profitable due to high synergies, low requirements of additional space and the use of existing infrastructure. Starting in the fiscal year of 2025/26, Aurubis expects the expansion stage to make an additional EBITDA contribution of about € 90 million per year. In addition to many other locational benefits, the Richmond plant will also profit from low electricity and gas prices. Construction work for the first construction stage has already started at the Richmond site. Combined with the second expansion stage, Aurubis expects an EBITDA contribution of about € 170 million from the fiscal year of 2026/27 with a total investment volume of € 640 million.
Expansion of Recycling Business at Hamburg Site
To secure the main business, further investments of about € 190 million in the Complex Recycling Hamburg (CRH) project million were approved. In the future, Aurubis will be able to process about 30,000 tons of additional recycling material and internal complex smelter intermediates there. The company thus contributes to the circular economy by closing internal and external material cycles.
The process developed specifically for CRH optimizes the utilization of existing facilities and expands the metallurgical capabilities in the Aurubis smelter network, thus differentiation the company from its competitors. In addition, CRH enables improved precious metal processing with shorter process times.
"The CRH project keeps considerably more added value in-house," says Heiko Arnold, COO of Aurubis. "The project also impressively demonstrates our research and development expertise. No other project integrates into our smelter network so strongly and optimizes so many value chains at the same time. And last but not least: CRH is the basis for further, important strategic projects at the plant and a clear commitment to the Hamburg site."
The company expects the project to make an annual contribution to earnings of around €40 million once it starts operations in 2025.
Expansion of the Solar Park in Bulgaria
The expansion of the already existing photovoltaic plant at the Pirdop site makes up the third project. The output of the plant there will be increased by 14 MWp to 24 MWp through investments of around € 12 million.
In addition, solar panels worth € 8 million will be purchased for further expansion of the solar park. The expansion includes the use of stationary, double-sided modules, characterized by higher productivity than conventional V-modules. The plant is scheduled to start operations in 2024.
Aurubis is thus expanding the country's yet largest solar park to meet its own demands. After the second expansion stage, the park's output will correspond to the power demand of 9,000 households. Compared to coal-fired energy generation, the park will save 34,000 tons of CO2 each year. This adds up to 500,000 tons for the projected operating period of 15 years. Aurubis' solar park thus constitutes an important building block for further decarbonization in Bulgaria. The project also contributes to Aurubis' sustainability targets, which include reducing Scope 1 and 2 emissions by 50 percent until 2030.
Financing Growth from Current Cash Flow
A capital increase for the planned projects will not be needed, as Aurubis plans to finance them largely from current cash flow. In the future, the chosen course for growth will increasingly be supported by a flexible and anticipatory dividend distribution. Aurubis will simultaneously ensure appropriate shareholder participation.
At € 1.80 per share (prev. year €1.60), the Supervisory and Executive Board are proposing the highest dividend in the company's history. This is the result of the solid 2021/22 earnings (operating EBT) of € 532 million (prev. year adjusted €381 million).
The company expects operating earnings before taxes of € 400 million to € 500 million in the current fiscal year 2022/23. A detailed commentary on the fiscal results of the year was published in the Annual Report 2021/22 on December 21, 2022.
