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Aurubis AG, Europe’s largest copper producer, on Monday reiterated its forecast for a strong core profit in its current financial year after its quarterly earnings jumped 20%.
Aurubis confirmed its forecast for operating earnings before taxes (EBT) of 450 million-550 million euros ($494.69 million to $604.62 million) in its 2022-23 annual year, which was raised in April from the previous outlook of 400 million-500 million euros.
Operating EBT in the third quarter ended June 30 rose about 20% to 115 million euros year-on-year.
Aurubis said reasons for the strong result included increased charges to process copper concentrate (ore), high price premiums for the copper it produces and strong demand for copper wire rod at high prices.
These positive effects counterbalanced a significant drop in revenue for the by-product sulfuric acid, decreased demand for flat-rolled products and inflation-led costs.
The quarterly result was achieved despite a 40-day maintenance shutdown at its Bulgarian plant, Aurubis CEO Roland Harings said.
“Sustained high demand drivers, like the mobility and energy transitions, paired with excellent plant availability led to high wire rod revenues in the third quarter as well,” Harings said.
But in Europe, some forecasts predict a drop in activity in key industries, it said.
“Due to capacity growth in existing mines worldwide along with the ramping-up of new projects, expansion of global mine output is anticipated to outpace growth in smelter capacities,” it said.
When the mine output is high, mines and other owners of copper ore must compete for smelter capacity, which supports refining fees, called concentrate treatment and refining charges (TC/RCs).
“Aurubis expects to see ongoing high demand for copper cathodes and wire rod from our customer markets for the remainder of fiscal year 2022/23, though demand from individual sectors, in particular the construction industry, remains weak,” it said.
(By Michael Hogan; Editing by Rachel More and Sherry Jacob-Phillips)
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