Aurubis Q1 profit drops on high power prices; optimistic for full year
HAMBURG (Reuters) -Aurubis AG, Europe's largest copper producer, posted a fall of about 24% in quarterly earnings on Monday, as high energy prices and inflation burdened despite strong demand but maintained upbeat earnings estimates for its full-year profits.
Aurubis posted operating earnings before taxes (operating EBT) in the first quarter to end-December of its 2022/23 financial year of 125 million euros ($135 million), down from 164 million euros in the same year-ago quarter.
But the company confirmed its December forecast of full-year 2022/23 operating EBT of between 400 million euros and 500 million euros.
The results were "respectable" amid pressures from high inflation and increased energy costs, Chief Executive Officer Roland Harings said.
"For the 2022/23 fiscal year as a whole, we expect earnings to be at the upper end of the forecast range."
There is continued high demand for Aurubis' products, he said.
But compared to the previous year, market conditions for copper scrap and sulphuric acid proved less attractive in the first quarter of 2022/23, which had a dampening effect on results, the company said.
Aurubis said it expects growing global copper concentrate (ore) supplies in the calendar year 2023.
"Due to capacity growth in various South American countries and in existing mines worldwide along with the ramping-up of new projects, growth in global mine output is anticipated to outpace growth in (copper) smelter capacities."
Its smelters are already supplied with scrap and other recycling material beyond the second quarter of the financial year.
"Aurubis expects to see ongoing high demand for all copper
products for the rest of fiscal year 2022/23," it said. "We anticipate demand for copper wire rod to remain high in Europe and in North America."
"We expect demand for shapes and flat rolled products to remain at the high prior-year level."
(Reporting by Michael Hogan; Editing by Paul Carrel and Rashmi Aich)