Befesa reports 8% y-o-y revenue growth in H1 2023

When globally, we are witnessing a downfall in terms of revenue and profits in the aluminium industry, Luxembourg-headquartered metal waste recycling house Befesa has released its financial outcomes for H1 2023, which denotes some positivity to the sector. The company achieved cumulative revenue of 615 million euros ($676.24 million). Moreover, the adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for H1 2023 amounted to 95 million euros ($104.46 million).

The company experienced an 8 per cent rise in revenue, reaching 615.5 million euros ($676.8 million) in H1 2023. This marked an improvement from the 572.5 million euros (around $629.5 million) recorded during the same period in 2022. The noteworthy boost in revenue was primarily attributed to the substantial input from the company's zinc refining operations in the United States.

However, the adjusted EBITDA for the initial half of 2023 amounted to 94.7 million euros ($104.13 million), reflecting a 20 per cent decline compared to the initial half of 2022, which had reported 118 million euros (approximately $129.75 million). This decrease was driven by multiple factors, including the downward trend in zinc prices on the London Metal Exchange (LME), along with an unfavourable rise in zinc treatment expenses that were 19 per cent higher when compared to the previous year. The company highlighted that the persistently elevated cost of coke was mitigated by the advantage of lower gas and electricity prices.

In summary, Befesa's revenue witnessed an 8 per cent growth driven by its US zinc refining operations. The adjusted EBITDA faced a 20 per cent decline due to lower zinc prices on LME and increased zinc treatment costs, partially offset by reduced gas and electricity expenses.

Javier Molina, the Executive Chairman of Befesa, said, “We achieved a solid performance in H1, despite a very challenging macroeconomic environment. This demonstrates Befesa’s robust business model and supports our confidence in long-term growth. Our performance was affected by various temporary external factors, including unfavourable zinc and aluminium prices, zinc treatment charges and persistently high coke prices. We expect a stronger H2 based on a recovery in zinc prices, decreased Coke prices and better volumes. We are committed to rigorously executing our growth projects, focusing on refurbishing the Palmerton plant in the USA and our third plant in China, which will position us strongly for the years ahead.”

Befesa reports a 6 per cent year-on-year decrease in the throughput of electric arc furnace (EAF) steel dust, totalling 592,000 tonnes. The average capacity utilization stood at approximately 71 per cent. This decline was mainly attributed to US operations' performance and the earthquake's impact on Turkey.

The recycling quantities of aluminium salt slags and SPL (spent pot lining) experienced a 1 per cent annual decline, totalling 171,000 tonnes. The average capacity utilization stood at approximately 73 per cent. Conversely, there was a 3 per cent year-over-year rise in volumes of secondary aluminium alloys, reaching 87,000 tonnes, according to Befesa. The average capacity utilization for this was around 86 per cent.

If you're looking to delve deeper into the aluminium recycling sector, please click here.