Aurubis ETR: NDA reported a stronger second quarter in its 2025/2026 fiscal year and raised its full-year earnings outlook, citing high metal prices, improving recycling markets, healthy copper product demand and stronger sulfuric acid markets.
Chief Executive Officer Toralf Haag said operating earnings before taxes rose 15% from the prior quarter to EUR 121 million in Q2. For the first six months, operating EBT totaled EUR 226 million, broadly in line with the prior year, while operating EBITDA increased 3% to EUR 351 million.
“In the recent quarters, key drivers of our business have developed in our favor,” Haag said, pointing to “persistently high metal prices, improved recycling markets, as well as healthy copper product and sulfuric acid markets.”
Net cash flow for the first half was EUR 161 million, down from EUR 190 million a year earlier, which the company attributed mainly to higher net working capital tied to increased metal prices. Free cash flow before dividend improved to negative EUR 63 million from negative EUR 151 million last year, supported by more than EUR 100 million less capital expenditure.
Higher Guidance Reflects Improved Market Backdrop
Aurubis lifted its full-year forecast for fiscal 2025/2026. The company now expects operating EBITDA of EUR 700 million to EUR 800 million and operating EBT of EUR 425 million to EUR 525 million.
Chief Financial Officer Steffen Hoffmann said the updated guidance reflects the first-half performance and a better outlook for key business drivers. Within the group forecast, Aurubis expects operating EBT of EUR 370 million to EUR 430 million in Custom Smelting and Products and EUR 115 million to EUR 175 million in Multi-Metal Recycling.
The company also now targets group operating ROCE of 10% to 12%. Hoffmann said Aurubis continues to aim for free cash flow before dividend of at least break-even for the full year, while cautioning that working capital fluctuations in a high-metal-price environment may affect free cash flow at the balance sheet date.
Metal Prices, Recycling and Sulfuric Acid Support Earnings
Hoffmann said group revenue increased 23% in the first half to about EUR 11.3 billion, mainly because of higher metal prices, especially precious metals. He said a higher metal result and slightly higher earnings from processing recycling raw materials, copper products and sulfuric acid sales offset lower concentrate treatment and refining charges.
The company’s total gross margin for the first half was about EUR 1.1 billion, up slightly from approximately EUR 1.08 billion a year earlier. Hoffmann said the contribution from the metal result increased year over year, while products and premiums remained broadly stable. Sulfuric acid was slightly higher, though he said rounding effects masked the increase in the presentation. TCRCs and refining charges were down overall because of tight concentrate markets, although recycling-related refining charges were slightly higher.
Haag said gold and silver prices outperformed copper in Q2 and both precious metals reached new all-time highs before easing somewhat amid the conflict in the Middle East. Copper prices remained broadly stable at historically high levels.
On sulfuric acid, Haag said Middle East shipping restrictions tightened the global sulfur market, pushing spot sulfuric acid prices sharply higher. He said Aurubis produces more than 2 million tons of sulfuric acid annually, with about 85% sold under large annual contracts with quarterly or semiannual pricing and about 15% sold on the spot market.
In response to an analyst question, Hoffmann said roughly EUR 15 million to EUR 20 million of the company’s guidance increase was attributable to an additional second-half effect from sulfuric acid, with most of that impact expected in Q4. He said if prices stay at current levels, the effect would continue and be higher in fiscal 2026/2027.
Segment Performance Mixed by Market Exposure
In Multi-Metal Recycling, gross margin rose 11% to EUR 387 million, driven by a stronger metal result supported by higher gold, silver and copper prices. Hoffmann said refining charges for complex recycling materials improved and largely offset slightly lower throughput. Operating EBITDA rose to EUR 103 million from EUR 84 million, and operating EBT improved to EUR 56 million from EUR 51 million despite higher depreciation.
Operating ROCE in the segment fell to 1.2%, which Hoffmann attributed to weaker financial performance from one-off effects and project-related ramp-up costs in the previous fiscal year, as well as a 30% increase in capital employed tied primarily to growth investments, especially Richmond.
In Custom Smelting and Products, gross margin was about EUR 710 million. Hoffmann said the slight year-over-year decline reflected sharply lower concentrate TCRCs, partly offset by higher metal prices and product sales. Concentrate throughput increased to 1.25 million tons, reflecting good operating performance in Hamburg and Pirdop, and enabled higher sulfuric acid sales in strong market conditions. Segment operating EBT was EUR 211 million, while operating ROCE remained strong at 16.5%.
Strategic Projects Advance, Richmond Ramp-Up Slower
Haag said Complex Recycling Hamburg was successfully hot commissioned with its first melt on March 23, and the plant has since begun gradual ramp-up. The first blister copper has already been supplied to the Hamburg primary smelter. The project is designed to optimize material flows and improve metal recovery at the Hamburg site, allowing Aurubis to process internal intermediates and about 32,000 tons of external complex raw materials per year.
At Aurubis Richmond, Haag said Phase 1 is progressing, with key furnaces and supporting systems commissioned and a gradual increase in complex feed materials. Construction work for Phase 2 is largely finalized, with commissioning the next step. However, he told analysts that technical challenges in Q2, which have since been resolved, caused delays in the ramp-up. From the company’s current perspective, Richmond is expected to end the fiscal year slightly below EBITDA break-even.
Haag also said the Pirdop tank house expansion is in its final stage, with technical installations and construction work essentially complete. Gradual production start is scheduled for summer 2026, increasing refined copper capacity to about 340,000 tons from around 220,000 tons currently.
Balance Sheet Remains Within Targets
Hoffmann said total costs rose 3% to EUR 949 million, mainly because scheduled depreciation and amortization increased by about EUR 23 million due to investment activity and strategic project ramp-ups. Personnel costs also increased because of wage inflation and higher average headcount, while energy costs declined to 8% of total cost due to energy management and hedging.
The operating equity ratio was 48.6%, down from the prior year because of balance sheet expansion from higher working capital, but Hoffmann said it remained “very solid” and above the company’s target of more than 40%. Debt coverage increased to 0.6, still well below the ceiling of 3.0.
Haag said direct exposure to the Middle East is limited because Aurubis does not receive concentrate from the region and purchases only limited scrap volumes there. He said the company also has no major sales exposure to the region for metal products or sulfuric acid. Indirect impacts from higher oil and gas prices on energy and freight costs are manageable, while sulfur supply disruptions could support sulfuric acid markets.
“Overall, from today’s perspective, we anticipate more medium-term opportunities than risks for Aurubis,” Haag said.
About Aurubis ETR: NDA
Aurubis AG processes metal concentrates and recycling materials in Germany. The company processes scrap metals, organic and inorganic metalbearing recycling raw materials, and industrial residues. It also offers wire rods and specialty wires, shapes, bars and profiles, industrial rolled products, and architectural rolled products. In addition, the company produces gold, silver, tin, lead, lead-bismuth alloy, lead-antimony litharge, tellurium metals, and tellurium dioxide. Further, the company engages in the recycling of copper, copper scrap, alloy scrap and other recycling materials, precious metals, and other non-ferrous metals.
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