Metallo purchase benefits Aurubis’ bottom line

Hamburg, Germany-based Aurubis AG has reported that it increased operating earnings before taxes by 15 percent to 221 million euros ($268 million) in the past fiscal year. Operating consolidated net income also increased, rising by 21 percent to 167 million euros ($203 million).

The company says significantly higher refining charges for copper scrap and other recyclable materials contributed to its higher earnings. Its throughput of material with low metallic content also increased substantially in part because the Metallo sites in Beerse, Belgium, and Berango, Spain, were included in its results starting in June. With the purchase of Metallo, Aurubis says it has expanded its product portfolio and its capacities for processing lower metal-content grades of scrap.

“The integration of Metallo is going completely according to plan,” Aurubis AG Executive Board Chairman Roland Harings says. “We are confident that we will even exceed the targeted synergy potential of 10 to 15 million euros ($12 million to $18 million) in the next three years.”

Earnings also were positively affected by a significantly higher metal gain accompanied by increased precious metal prices and a substantially higher concentrate throughput, counterbalanced by lower treatment and refining charges for copper concentrates owing to market factors, Aurubis says.

Cathode sales to Asia, particularly to China, which had a quota system in place for much of 2020 for copper scrap imports that led it to purchase more cathode, compensated for the drop in demand from Europe related to the coronavirus pandemic.

Harings says, “Our broad position in a number of regions, and particularly our expertise in copper and nonferrous metal recycling, provide us with stability. In spite of the ongoing pandemic, we therefore look to the new fiscal year with a sense of cautious optimism and expect the result to be in a slightly higher target range.”

Aurubis says it expects global copper demand to increase in 2021 following the temporary decline in 2020 related to the pandemic. Therefore, the company says its copper premium will stay at the prior-year level of $96 per metric ton above the London Metal Exchange three-month benchmark.

The company adds that it expects copper concentrates and recyclables to be well supplied.

While Aurubis acquired Metallo earlier this year and formed a joint venture for cable recycling with TSR Recycling GmbH & Co. KG, which is expected to be completed in the first quarter of 2021, it plans to sell its flat-rolled products (FRP) segment.

“It is still our clear intention to sell FRP, and we are in an advanced stage of negotiations,” Harings says. “However, the process has been delayed by the coronavirus crisis.”

Aurubis says sustainability is another key part of its strategy. To that end, the company plans to certify its production sites, starting with its plant in Pirdop, Bulgaria, to the Copper Mark, which it refers to as a quality seal for the sustainable production of copper. It also will embark on other projects intended to reduce its CO₂ footprint.

The company’s complete “Annual Report 2019/20” is at www.aurubis.com/en/investor-relations/news-and-reports/annual-reports.