The fiscal year got off to a good start for Aurubis AG. In the first quarter of 2022/23, which ended on December 31, 2022, the multi-metal producer achieved operating earnings before taxes (operating EBT) of € 125 million. As expected, quarterly earnings were thus lower than the record level of €164 million achieved a year earlier due to inflation and energy price increases.
With an operating EBT of € 35 million, the Multimetal Recycling segment was also unable to match the strong performance of the previous year (€ 83 million). On the other hand, Aurubis achieved operating EBT of € 108 million in the Custom Smelting & Products segment, which was about 15 percent higher than in the prior-year quarter (€ 94 million). IFRS consolidated earnings before taxes (EBT) amounted to € 71 million (previous year: € 405 million).
Economic successes in several areas
In the reporting period, the operating return on capital employed (ROCE) was again above the Aurubis target mark of 15 percent and reached 16.3 percent (previous year: 17.9 percent). In the first quarter of 2022/23, Aurubis' smelter network continued to show a solid operating performance overall. This was primarily driven by the results of the Bulgarian site in Pirdop, where concentrate throughputs once again reached the very high level of the previous year. The company's copper products were also in high demand, so Aurubis was able to achieve higher product revenues through price increases.
On the other hand, the market conditions for copper scrap and sulfuric acid were less attractive than in the previous year, which had a dampening effect on earnings. In addition, the metal result was weaker due to the materials used.
Medium-term planning of growth projects
Aurubis continues to have a solid financial position. With an equity ratio of 54.5 percent at the end of the reporting quarter, the company is debt-free. Based on the Company's financial strength, the Company's strategic agenda can be implemented in a targeted manner. At present, this comprises approved growth projects with a volume of around €1 billion, which will be implemented over the next three to four years. Subsequently, the projects will contribute around €230 million to the Group's operating earnings from 2026/27. The company's medium-term planning already includes further growth projects. If they reach the appropriate level of maturity, they are expected to be approved this year. Net cash flow, which fluctuates strongly during the year, amounted to €-64 million (previous year: €-85 million) and is attributable to the high level of inventories in the quarter under review.
"We started the new fiscal year with a very respectable result - taking into account in particular high inflation and increased energy costs. The continued strong demand for our products shows us: Aurubis metals are needed. They make the transformation of industry and society toward a sustainable orientation possible in the first place. For fiscal year 2022/23 as a whole, we expect earnings to be at the upper end of the forecast corridor we set," explains Aurubis Executive Board Chairman Roland Harings.
For fiscal year 2022/23, Aurubis expects operating EBT between € 400 million and € 500 million and operating ROCE between 11 percent and 15 percent. In the remainder of the fiscal year, the company expects the following factors to have a positive impact on full-year earnings: further growth in global copper demand, a roughly 35 percent increase in treatment and refining charges for copper concentrates, a significant increase in the Aurubis copper premium, higher product surcharges with stronger demand for copper products.
