Befesa nets $120M in first half of year

Befesa S.A., a Luxembourg-based global provider of recycling services enabling handling steel and aluminum mill byproducts, has reported another adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 118 million euros ($120.4 million) in the first half of this year.

The company says that represents an increase of 25 percent year on year, and that growth in this year’s second quarter “was primarily driven” by good volume performance in its Steel Dust business unit, including a contribution from its United States zinc operations.

“In the first half we continued to deliver 25 percent year-on-year EBITDA growth in a challenging market environment,” says Javier Molina, executive chair of Befesa. “In the medium to long term, decarbonization and electric vehicles are favorable trends for the secondary steel and aluminum markets, benefitting our customers.”

Molina continues, “Our environmental services are a key enabler of this transition. We have enhanced our organizational structure and are finalizing our five-year Sustainable Global Growth Plan to seize these opportunities. We are looking forward to sharing this globally balanced investment program of around 500 million euros ($510 million) with our shareholders and analysts.”

Regarding its first-half 2022 results, Befesa says higher base metal prices offset energy inflation and higher zinc treatment charges. Its overall plant utilization levels remained high (around 80 percent), the firm says, in both its Steel Dust and Aluminium Salt Slags business units.

The company says during the second quarter it “continued its hedging rigor and sold further zinc volume forward.” Befesa says its hedge book is now fully extended up to January of 2025 at the latest hedging volume run rate of around 38,000 metric tons of zinc sold forward per quarter, or around 152,000 metric tons per year.

Regarding Befesa’s expansion in China, it says its first plant, in Jiangsu Province, is in commercial production and has more than 80 percent of furnace dust capacity contracted with customers. However, the company adds, “supply and operations are COVID-constrained.”

The commissioning of its second plant in China, in Henan Province, is being prolonged because of COVID constraints, with ramp-up expected to be finalized in the second half of this year.