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Aurubis Group generates good results in 2016-17

Metal News - Published on Thu, 21 Dec 2017

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The Aurubis Group generated operating earnings before taxes of EUR 298 million in fiscal year 2016/17 (previous year: EUR 213 million). The return on capital employed increased to 15.1 % (previous year: 10.9 %). The supplier of nonferrous metals thereby fulfilled market expectations, as well as its own ambitious forecast.

A significantly increased concentrate throughput compared to the previous year drives the result, although a legally-mandated maintenance shutdown limited the capacities in Hamburg in the first quarter of the fiscal year. In the previous year, a maintenance shutdown at the production site in Pirdop (Bulgaria) also had an impact; however, the capacity optimization carried out in connection with this at the site conversely reflected positively in fiscal year 2016/17. An advantageous input mix as well as good availability of copper concentrates, significantly higher refining charges for copper scrap with a good supply, a higher metal yield with increased metal prices, increased sales of shapes and flat rolled products and a strong US dollar during the fiscal year continue to support the result. The measures implemented from the efficiency enhancement program, whose annual target of € 30 million at the minimum was completely met, also contributed to the increase in results.

However, weaker sales prices for sulfuric acid due to oversupply on the markets, lower sales of wire rod and a lower copper premium strained earnings.

Mr Jurgen Schachler, Chief Executive Officer of Aurubis AG said that “Despite the varied markets we have generated good results, with which we have fulfilled market expectations. We have also achieved initial successes from our efficiency enhancement program. However, further efforts are needed, so that the program can unfold its full potential in the coming years.”

The IFRS consolidated earnings before taxes were EUR 456 million (previous year: EUR 159 million). In contrast to operating earnings, this includes measurement effects due to copper price fluctuations and other factors. Therefore, the operating earnings are decisive for Aurubis in assessing the business performance and managing the company.

Higher proposed dividend
The Executive Board and Supervisory Board will recommend a dividend of EUR 1.45 per share at the Annual General Meeting on March 1, 2018. The payout ratio would therefore be 28 % of the operative group earnings (this would correspond to 47 % of Aurubis AG’s unappropriated earnings, which so far has been used as the refer-ence value for the payout ratio; previous year 46 %). The dividend yield based on the XETRA closing price of EUR 68.54 for Aurubis shares as at 9/29/2017 would amount to 2.1 % (previous year: 2.5 %).

Stable result expected in the new fiscal year
In an environment characterized on the whole by economic and political uncertainties, Aurubis expects stable to good demand for copper products in the coming fiscal year due to the analyses of various institutes and associations, especially because copper is an essential material for future technologies such as digitalization or renewable energies. However, the treatment and refining charges benchmark for copper concentrates has not yet been determined; also, the markets for copper scrap and sulfuric acid are difficult to forecast, because they are dependent on many short-term and regional factors.

Jurgen Schachler predicts that “With the continuation of our efficiency enhancement program, we will be able to cushion a portion of these uncertainties. Therefore we anticipate a result at approximately the same level as 2016/17 for the current fiscal year. Due to our increasing investment activity, we additionally expect a slightly lower operating ROCE.”

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Posted By : Rabi Wangkhem on Thu, 21 Dec 2017
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