(Reuters) - Belgium’s Umicore SA on Friday beat first-half core profit expectations as a strong performance in recycling offset a slump in demand for auto parts.
The maker of catalytic converters and battery materials for carmakers said its adjusted earnings before interest and taxes (EBIT) rose to 243 million euros ($289.1 million) from 240 million, topping the 224 million expected by analysts in a company-provided poll.
The auto industry has taken a significant hit from lockdowns which have halted car production and closed showrooms.
“Despite the brutal effects on society and industry of the COVID-19 pandemic, Umicore showed great resilience and turned in a solid performance in the first half of 2020,” CEO Marc Grynberg said.
Umicore, which is active in the energy, automotive and recycling sectors, said its recycling business benefited from increased activity levels, high metal prices, and favourable trading conditions.
Its recycling division, which in 2019 accounted for about a third of the group’s core profit, accounted for 72% of it in the first half of the year with a recurring EBIT of 191 million euros, beating the consensus.
However, the company warned its recycling performance in the second half would reflect a 4-week planned maintenance shutdown in July at its Hoboken smelter.
Umicore still expects a fall in 2020 adjusted EBIT and repeated it sees 25% decline in global car production this year.
($1 = 0.8406 euros)
Reporting by Milla Nissi and Charles Regnier in Gdansk; editing by Jacqueline Wong and Jason Neely