Befesa has estimated its 2020 EBITDA to hit the range of €100-135mn ($109-147mn) by the end of 2020 because of weak global demand and metal prices.
The steel dust and aluminum slags recycler based its guidance on the company’s performance during the 2009 financial crisis, it indicated while reporting its Q1 2020 earnings on Thursday. However, Befesa added, the result would depend on the severity of government measures to contain COVID-19 in the countries where it operates, and on the pace of global economic recovery.
For the rest of this year, the European recycler plans to focus on its organic growth strategy and expansion in China into a high volume, high growth business over the next few years, according to Javier Molina, chief executive officer of Befesa.
The company’s steel dust throughput volumes increased by 10pc in Q1 2020 to 185,656mt from 168,968mt during the same period last year. The higher volume, the company noted, was due to its Turkey facility restarting operations and working at more than 90pc capacity utilization. Befesa’s secondary aluminum alloy output remained almost flat during the quarter, falling by 0.1pc to 47,919mt from 47,965mt in Q1 2019.
Its waelz oxide sales grew by 27.3pc in Q1 2020 to 67,708mt from 53,189mt in Q1 2019, while its salt slags and spent pot linings recycling volumes fell by 3.4pc to 124,697mt from 129,095mt during the same comparative period.
Weaker metal prices impacted the company’s Q1 2020 sales. It reported a 6.2pc decline in its average aluminum alloy market price to €1,433/mt during the first quarter from €1,528/mt in Q1 2019. Its blended zinc prices also declined by 10.9pc to €2,114/mt from €2,373/mt in the same comparative period.
The company’s revenue remained almost flat, falling 0.1pc to €179mn in Q1 2020 from €179.1mn in the same quarter last year, while its EBITDA fell by 22pc to €33.6mn during the first quarter from €43mn in Q1 2019. Befesa reported a 33.5pc decrease in net profit to €14.7mn in Q1 2020, compared with €22.1mn during the same period last year.