FRANKFURT/HAMBURG Feb 13 German copper smelter
Aurubis AG confirmed on Monday its fiscal 2016/17
outlook and reported a higher-than-expected operating profit for
the first quarter.
Operating earnings before taxes halved to 18 million euros
($19.1 million) in the first quarter ended December 2016
compared with the same period the year before, but beat
analysts' average estimate of 13 million euros, according to a
First-quarter revenue rose 3 percent to 2.462 billion euros,
broadly in line with analysts' estimate of 2.467 billion.
"The result was significantly influenced by a scheduled
shutdown in Hamburg," the company said.
"Aurubis therefore confirms its forecast for the full fiscal
The company had warned in December its first-quarter
earnings for the current financial year will be hit by a
three-week maintenance shutdown from October 2016 at its huge
Hamburg smelter, a legal requirement every three years.
Without the smelter shutdown the group would have achieved
operating earnings before taxes (EBT) of nearly 60 million
euros, Aurubis said.
Aurubis had also said in December that it expected
"significantly higher" operating EBT and operating return on
capital employed (ROCE) for the group in the new fiscal year
A strong U.S. dollar helped first quarter results along with
improved revenue from copper scrap input due to higher
throughputs and increased metal prices.
Copper prices have been rising steadily since
October 2016 on expectations consumption will be strong in the
United States and China.
When copper prices are high, scrap metal merchants have more
incentive to collect old metal and scrap supplies improve.
Copper concentrate spot treatment and refining charges
(TC/RCs) in spot business decreased in the first quarter,
influenced in particular by Chinese smelters' increased
purchasing activity, the company said.
Copper TC/RCs are paid by miners to smelters to refine
concentrate into metal and are a key part of the global copper
Benchmark annual copper ore treatment and refining charges
(TC/RCs) for 2017 agreed in November 2016 have been criticised
by Aurubis as too low.
The company has focused on refining more complex
concentrates which have higher TC/RCs, it said.
"Aurubis anticipates a good market situation overall in both
the raw material and product markets," Aurubis said.
In the copper production sector, Aurubis expects the volume
of copper concentrates processed to be higher than the previous
($1 = 0.9408 euros)
(Reporting by Harro ten Wolde and Michael Hogan; Editing by
Gopakumar Warrier and Amrutha Gayathri)