Befesa sees brighter 2024 after earnings drop hits shares (updated)
29/02/2024 09:03
(Adds share moves)
Feb 29 (Reuters) - Luxembourg-based metal recycling
company Befesa BFSA.DE reported on Thursday a 15% drop in 2023
adjusted core profit, but forecast strong growth for this year
as a "perfect storm" of higher costs and lower metal prices
should unwind.
Befesa shares dropped as much as 3.1% to 28.36 euros in
early trade, their lowest since Nov. 9. The stock is down 19.03%
so far this year.
The group's annual adjusted earnings before interest, tax,
depreciation and amortisation (EBITDA) fell to 182 million euros
($197 million), in line with guidance, mainly driven "by lower
zinc prices, the unfavourable increase in zinc treatment charges
(TC) and higher coke prices", Befesa said.
Net profit in 2023 was down 45% versus 2022 to 58 million
euros, while revenue increased 4% to 1.18 billion euros thanks
to growth at its U.S. zinc refining operation.
"2023 has been a perfect storm for Befesa, as we faced a
confluence of adverse external factors (...). Despite these
challenges, our solid EBITDA levels and cashflow demonstrated
the resilience of our business model," said Befesa Executive
Chair Javier Molina.
The company will propose a dividend of 0.73 euro per share,
down from 1.25 euros the previous year, but in line with its
policy of paying out 40%-50% of earnings.
Befesa said it saw strong growth this year as "many of the
headwinds (...) faced in 2023 should subside in 2024 due to the
temporary nature of the external pressures".
It forecast a more positive combination of zinc TCs and
prices this year, a normalisation in coke price and an improved
zinc hedging price strategy.
In 2023, zinc price averaged 2,450 euro per tonne, down 26%
from 2022, while zinc TCs rose 19% over the same period, the
company said.
Befesa said it would release net profit guidance for this
year alongside first quarter results on April 25.
($1 = 0.9232 euros)
(Reporting by Alberto Chiumento, additional reporting by
Anastasiia Kozlova, Tristan Veyet; Editing by Chizu Nomiyama and
Mark Potter)
((Alberto.chiumento@thomsonreuters.com))