Aurubis ETR: NDA reported higher operating earnings for the first nine months of fiscal 2025/26, supported by metals pricing, recycling activities, sulfuric acid and copper-product demand, while management said it expects full-year operating EBT near the upper end of its forecast range.
Operating earnings before taxes rose 31% year over year to €374 million in the first nine months, while operating EBITDA reached €570 million. Third-quarter operating EBT was €149 million, up 23% from the preceding quarter, according to Chief Executive Officer Toralf Haag.
Group revenue increased 29% to €17.8 billion, primarily reflecting higher metal prices and solid operating performance, Chief Financial Officer Steffen Hoffmann said. Operating return on capital employed improved to 9.4% from 9.1%, marking its third consecutive quarterly increase.
Metals, sulfuric acid and recycling offset concentrate pressure
Aurubis said its results benefited from higher copper, gold and silver prices, as well as improved production volumes across the group. Sulfuric acid was a particularly supportive earnings driver during the third quarter as Middle East shipping restrictions and China’s sulfuric-acid export ban pushed prices to new highs.
Hoffmann said the company leveraged the tight sulfuric-acid market sooner than it had expected. He said sulfuric acid could provide a “small double-digit” million-euro uplift in the fourth quarter compared with the third quarter, and indicated the business could contribute about €180 million for the full fiscal year.
Recycling refining charges also remained supportive, though the company cited continued weakness in copper concentrate treatment and refining charges, or TC/RCs. Spot TC/RCs declined further as global smelter demand continued to exceed mine supply. Aurubis said its long-term sourcing portfolio and ability to process complex concentrates allow it to achieve terms better than spot-market levels, though it expects the difficult concentrate environment to affect 2027 supply negotiations.
For the first nine months, gross margin increased by roughly €140 million to about €1.7 billion. The metal result accounted for 43% of gross margin, up from 37% a year earlier. The combined share of TC/RCs and recycling refining charges fell to 21% from 27%, while products and premiums remained broadly stable at 36%.
- Multimetal Recycling: Operating EBT rose to €87 million from €36 million, while operating EBITDA increased to €162 million from €97 million. Gross margin rose €87 million to €589 million.
- Custom Smelting & Products: Operating EBT increased to €355 million from €342 million, and operating EBITDA rose to €461 million from €436 million. Concentrate throughput rose to 1.9 million metric tons and sulfuric acid sales increased to 1.8 million metric tons.
Inventory buildup weighs on cash flow
Net cash flow for the first nine months was negative €28 million, compared with positive €357 million in the prior-year period. The third quarter generated negative €189 million in net cash flow, compared with positive €169 million in the prior quarter.
Management attributed the cash-flow decline chiefly to a temporary buildup of intermediate-product inventory tied to the phased commissioning of the expanded tank house at Pirdop, along with seasonally higher finished-goods inventory. Higher metal prices and strategic-project ramp-ups also increased working capital.
Free cash flow before dividends was negative €365 million for the first nine months, compared with negative €211 million a year earlier. Aurubis said it expects inventories to decline by fiscal year-end and continues to expect net cash flow above the prior-year level of €677 million. It also reiterated its expectation of at least break-even free cash flow before dividends for the full year.
Capital expenditure totaled €373 million in the first nine months, including spending on Aurubis Richmond and a new precious-metals refinery in Hamburg. Hoffmann said cash capital expenditure for the full year is now expected to be below €600 million, rather than the previously referenced €670 million level, and said the company’s ambition is for next year’s capital expenditure not to exceed this year’s amount.
Richmond ramp-up delays shift earnings profile
Aurubis said the ramp-up of its greenfield recycling facility in Richmond, Georgia, is taking longer than originally anticipated because of technical challenges and changes in the available feed mix. The company now expects phase one to complete ramp-up in fiscal 2026/27 and phase two in fiscal 2027/28.
Haag said the Richmond facility is expected to contribute to group earnings in the current year to a similar degree as it did last year, below the previous expectation of EBITDA break-even. The revised timing shifts the project’s midterm earnings profile out by one year.
Management said Richmond’s medium-term annual EBITDA contribution is expected to remain in the triple-digit million-euro range, but below the company’s prior target level. Hoffmann said the revised outlook reflects technical ramp-up issues, higher costs and a less favorable input mix, rather than weaker commercial terms. Aurubis said capital employed at Richmond currently stands at about €800 million to €850 million.
Despite the Richmond revision, management reaffirmed its expectation that its portfolio of 11 strategic projects will provide a combined midterm EBITDA improvement of €260 million. Haag highlighted the successful startup of Complex Recycling Hamburg and the nearing commissioning of the Pirdop tank-house expansion as contributors to that outlook.
Guidance maintained, with EBT expected near top of range
Aurubis maintained its fiscal 2025/26 guidance for operating EBITDA of €700 million to €800 million and operating EBT of €425 million to €525 million. Management said operating EBT is expected to land around the upper end of that range, with fourth-quarter performance anticipated to be in a similar range to the third quarter.
The company also maintained its group operating ROCE guidance of 10% to 12%. Management said higher metals prices, recycling earnings, copper products and sulfuric acid are expected to help offset pressure from concentrate markets in the remainder of the fiscal year.
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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