Aurubis retains profitability in Q1 of fiscal year

Hamburg, Germany-based nonferrous metals producer Aurubis AG has reported operating earnings before taxes (EBT) of 111 million euros ($119.5 million) in the first quarter of its 2023-2024 fiscal year, which ran from Oct. 1, 2023, to Jan. 31, 2024.

The quarterly EBT figure is down 11 percent from the 125 million euros ($134.5 million) Aurubis earned in the comparable three-month span one year ago.

In the 12 months between the two results, Aurubis has acknowledged having been the victim of a sizable metals inventory- or purchasing-related fraud case that caused it to take a writeoff of approximately $198 million.

That case, along with a fatal incident at an Aurubis facility last year, combined to lead to the departure of three top Aurubis executives, including CEO Roland Harings, who is scheduled to depart this September.

There are few mentions of the 2023 woes in comments accompanying Aurubis’ most recent financial results. The company's net cash flow, which also was negative in the first quarter of the previous fiscal year, was minus $217.4 million in the quarter just completed. That compares with a figure of minus $66.7 million one year earlier.

Rather than involving the fraud case, Aurubis assigns the negative cash flow figure to a “build-up in inventories in the run-up to the planned maintenance shutdown at the Hamburg plant in May/June 2024.”

Aurubis says that project is the largest in the history of the Hamburg plant, involving an investment of more than $100 million in upgrades and another $150 million to be spent on decarbonization projects.

In comments accompanying the earnings report, Aurubis says it is anticipating commissioning its scrap-fed plant near Augusta, Georgia, by the end of the current fiscal year, or Sept. 30.

Regarding the global market in late 2023 and early 2024, Aurubis says it experienced a jump in wire rod sales. “Demand for wire rod — an intermediate product for copper cable and wire — persisted in the energy and infrastructure sectors in particular,” the firm says.

On its balance sheet, Aurubis says a lower metal result due chiefly to falling metal prices for nickel, palladium and copper had a counteracting effect.

“Our 111 million euros ($119.5 million) quarterly result shows that Aurubis continues to deliver strong results, even in challenging times," Harings says. "Our growth course is taking visible and measurable shape and delivering the first operating results.”

Aurubis expects demand for copper products and other metals the company produces to remain high. “An operating EBT of between 380 and 480 million euros ($409 million to $517 million) is anticipated for the current 2023/24 fiscal year,” the firm says.

“The realization of the growth strategy will continue uninterrupted in the current fiscal year, despite the restructuring of the executive board."