Befesa reports earnings boost in 2022

Luxembourg-based Befesa S.A. has reported what it calls a strong performance and record earnings levels in  2022. The recycler of steel mill electric arc furnace (EAF) dust and aluminum plant residuals credits healthy market activity in the United States and “higher metal prices” for its favorable results.

The company’s 2022 revenue of 1.136 billion euros ($1.21 billion) was an increase of 38 percent compared with the prior year. Befesa says its earnings before interest, taxes, depreciation and amortization (EBITDA) reached a record of 215 million euros ($228.7 million), which is up by 9 percent year on year.

“In 2022, despite a very challenging environment, we delivered the best financial results in the history of Befesa, thanks to our resilient business model and the contribution of the operations in the U.S.A.,” says Javier Molina, executive board chair of Befesa.

Continues Molina, “We expanded our U.S. operations further and acquired the remaining 93 percent stake in the U.S. zinc refining asset [American Zinc Recycling], unique in its kind in the world producing green zinc from 100 percent recycled raw materials.”

Molina says Befesa is on track to “invest 410 million to 450 million euros ($436 million to $479 million) through a self-funded capex program with attractive shareholder returns over the next five years.”

The acquisition of the American Zinc Recycling plant in North Carolina means Befesa now has four “recycling plants that produce waelz oxide (WOX),” says the firm. That means in the U.S. its zinc refining capacity is up to 140,000 metric tons per year of what it calls “special high-grade ‘green zinc,’ produced from 100 percent recycled raw materials.”

China is another growing market for Befesa. It commissioned its second Chinese plant in Henan province, China, last December. The company says it also is preparing its next EAF dust recycling plant (its 13th globally) to be situated in South China’s Guangdong province.

Befesa also has a plant in Turkey, which it says sustained “only minor damage” but which nonetheless halted operations. The firm says all of its more than 90 employees at the plant are safe and “were not directly harmed.” Befesa says it intends to restart operations in Turkey this month, “pending an assessment of the severity of the impact of the earthquake on the area.”

Hedging the metal it trades remains a key part of its approach, says Befesa. “In 2022, Befesa extended its zinc hedging book up to July 2025 and will continue to monitor the market to sell further volume forward at fixed prices beyond that date,” states the company. “As in previous years, once treatment charges in the zinc industry are settled [this month or next], Befesa will provide its earnings guidance for 2023 together with the first quarter 2023 results, scheduled for May 4.”

Looking out longer term, the company says “incremental EAF steel dust volumes [are] expected in the U.S. market over the coming years. At the same time, Befesa is progressing its China expansion. Befesa’s Sustainable Global Growth Plan projects will seize the opportunities that megatrends such as decarbonization and electric vehicle growth are generating in the steel and aluminum industries, enabling Befesa to target double-digit earnings growth on average over the next five years.”