![a wheel loader drives up to an aluminum furnace](/remote/aHR0cHM6Ly9naWVjZG4uYmxvYi5jb3JlLndpbmRvd3MubmV0L2ZpbGV1cGxvYWRzL2ltYWdlLzIwMjQvMDcvMTIvMjAxOF9ncmFuZ2VzX3JlbWVsdGluZ19maW5zcGFuZy13ZWIuanBn.A8dWt-BvlVU.jpg?w=948&h=533&format=webp&mode=pad&anchor=middlecenter&scale=both&bgcolor=F0F1F2)
Photo courtesy of Gränges
Gränges, a Sweden-based global leader in aluminum rolling and recycling in selected niches, has reported financial results for its second quarter and first half of 2024, which showed its sales volume increased by 8.6 percent to 130.9 thousand metric tons for the quarter, up from 120.5 thousand metric tons the previous year, while its net sales increased to 6,145 million Swedish kronor ($582.7 million), up from 6,008 Swedish kronor ($569.7 million).
“Our strong sales focus enabled us to return to growth in the beginning of the year despite weak demand. In the second quarter, those efforts yielded even better results," Gränges CEO Jörgen Rosengren says. "New business was a key driver behind our 9 percent sales volume growth in the quarter.”
The company’s adjusted operating profit increased to 471 million Swedish kronor ($44.7 million) from 450 million Swedish kronor ($42.7 million) in the second quarter of 2023, while its profit for the period was somewhat lower at 314 million Swedish kronor ($29.8 million) compared with 316 Swedish kronor ($30 million) in the second quarter of 2023.
Gränges’ total carbon emissions intensity decreased to 7.1 metric tons CO2e per ton of aluminum from 8.4 a year prior, while its recycled aluminum use increased to 46.6 percent from 41.1.
For the first half of this year, the company’s sales volume increased by 5.1 percent to 252.8 thousand metric tons from 240.6 thousand metric tons for the comparable period last year, and net sales decreased to 11,573 million Swedish kronor ($1.10 billion) from 11,976 Swedish kronor (1.14 billion). Profit for the period totaled 551 million Swedish kronor ($52.2 million), down from 570 Swedish kronor ($54.1 million) in the first half of 2023.
For the first half of the year, Gränges says its total carbon emissions intensity decreased to 7.3 metric tons CO2e per ton from 8.6 metric tons, while recycled aluminum use grew to 46 percent from 39.3 percent.
“In the second quarter, market demand was muted but stable," Rosengren says. "Both the backlogs and overstock that characterized last year are now more or less gone. Relative to 2023, the automotive market was somewhat weaker, and the HVAC market normalized”
He adds that the company compensated for customer price pressure and wage inflation with productivity.
“Combined with our good volume growth, this resulted in a 5 percent increase in operating profit to SEK 471 million, our best quarterly result ever," he says.
“We also continued to improve working capital efficiency, offsetting the increase in the aluminum price. This kept our net debt stable in the quarter even after funding capacity expansion and dividend payment. Our balance sheet thus remains strong, which creates stability and flexibility.”
Gränges' strategic plan, Navigate, was developed in 2021, with its initial step designed to restore profitability and completing its multiyear capacity investment programs in the U.S., Europe and Asia.
“We intend to finalize this first step of Navigate in 2024,” Rosengren says. “Our increased production capacity, improved profitability and stronger balance sheet together form a solid foundation for growth. Based on this foundation, we will now gradually shift focus to our strategy’s second step—“Build”—which aims at building a leading company in our industry.”
He says the company’s electrification solutions have been in high demand in Asia, which had led to strong volume growth and high capacity utilization locally.
“We have therefore agreed to extend our strategic partnership in China with Shandong Innovation Group," he continues. "The agreement gives Gränges ownership of a production facility in the Shandong province through an equity transaction. The new partnership enables us to continue to take market share and grow in the Asian electrification market. It will take some time to realize these benefits, but we expect a marginally positive contribution to our earnings per share in 2025.”
Regarding the company’s reduction in carbon intensity, Rosengren says Gränges already is in line with its 2025 climate goals.
“Record-high recycling contributed to our low emissions, but circularity is also a strategic objective in its own right,” he says, adding that the 230,000 metric tons the company has recycled in the last year in cooperation with its downstream and upstream partners put it halfway to its 2030 circularity goal.
While end-customer markets remain hard to predict, Rosengren notes they appear comparatively stable in the near term.
“We expect our continued focus on new business to drive a mid-to-high single-digit percentage volume growth in the third quarter compared to 2023," he says. "We also intend to offset any further
price pressure and wage inflation with further productivity improvements.”
Latest from Recycling Today
- No hope on the horizon for ferrous prices
- Tomra unveils material circularity initiative Retility
- Shinkong Synthetic Fibers invests $10M in Ambercycle facility
- Korea Zinc’s copper products earn SGS certification
- AMCS acquired by Swedish equity firm
- Plastics group honors recycling technology pioneers
- Tide Rock acquires Global Electronics Recycling
- RRA publishes open letter to California State Senate and Assembly