Befesa SA, based out of Luxembourg, a leading firm providing waste recycling services for the aluminium and steel industry, has shared its earnings for the first quarter of 2025. The company reported an upward graph wherein the earnings touched EUR 308.4 million (USD 350 million) compared to EUR 298.3 million (USD 338.5 million) a year ago.
Image source: befesa.com
The Y-o-Y operating cash flow of the company increased by 134 per cent, while the firm's net income and EPS (Earnings per share) witnessed an upward trend, growing by 97 per cent. Additionally, Befesa's EBITDA concerning the aluminium salt slag stood at EUR 9 million, indicating an increase of 32 per cent Y-o-Y.
The company's adjusted EBITDA also increased by 15 per cent, reaching EUR 55.8 million (USD 63.3 million) in Q1 2025 compared to EUR 48.6 million (USD 55.2 million) in Q1 2024, achieved by the company's favourable treatment charges (TC) for its recycling initiatives alongside strategically hedging prices whilst maintaining the average metal margin.
Befesa explained that the company achieved an upward financial trend despite reduced recycling volume and scheduled maintenance shutdowns, which further involved certain key aspects, as well as decreased volume in the aluminium and steel sectors.
As put forward by Asier Zarraonandia, the CEO of Befesa, "The 15 per cent increase in EBITDA underlines our ability to capitalise on favourable market conditions, particularly the historically low zinc treatment charges and robust zinc prices. With the Palmerton expansion progressing on schedule and our continued focus on operational efficiency, we are well-positioned to capture growth opportunities in our key markets. Our deliberate approach to capital allocation, emphasising deleveraging and strategic investments in low-risk projects, will deliver sustainable value as we progress toward our 2025 targets."
The company has two kilns, one in the US plant located in Palmerton, Pennsylvania, which made a hefty contribution to achieving the stated financials. The other kiln of the firm is on the verge of completion in this quarter itself, which shall further ramp up their financials.
Turkey and South Korea have been operating at regular levels. On the other hand, the firm's plant operations in China are said to be running at 50 per cent, affected by other metal production. The reason behind 50 per cent plant operation is due to the challenges prevailing in the market.
In the European market, the company is focused on increasing the capacity of secondary aluminium production, despite the weak auto market. This extended capacity will be witnessed in the organisation's existing plants in Germany and Bernburg, which is expected to be completed by the end 2026's second quarter.
The company witnessed a decrease in the overall recycling volumes of aluminium salt slags by 4 per cent Y-o-Y, standing at 107,000 tonnes. However, the overall utilisation capacity to produce aluminium salt slag is regarded to be 93 per cent.
Befesa's secondary aluminium alloy volume witnessed a 3 per cent Y-o-Y downtrend, standing at 43,000 tonnes. Again, the overall company utilisation capacity to produce secondary volume is regarded as 81 per cent.
For 2025, the firm expects its earnings to be between EUR 240 million (USD 272.4 million) and EUR 256 million (USD 300.7 million). This forecast indicates the company is likely to see a growth of 24 per cent in 2025, compared to 13 per cent in 2024.
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