LUXEMBOURG (dpa-AFX) - Industrial recycler Befesa is being hit surprisingly hard by high expenses for zinc smelting and coking coal. Due to the high costs, operating profit (Ebitda) adjusted for a special item is likely to be up to seven percent above or below last year's level this year, the company announced in Luxembourg on Thursday. On the stock market, the news was met with a slide in the share price.

Befesa shares lost around twelve percent at times in the morning, reaching 34.50 euros, their lowest level since November. In the late morning, it was still down by a good six percent at 36.74 euros, but remained one of the biggest losers in the MDax.

For the current year, Befesa management expects earnings before interest, taxes, depreciation and amortization (Ebitda) of between 200 and 230 million euros. This means that the target range is evenly around the 215 million euro mark - the result that Befesa had achieved in 2022 without the one-off effect from a US takeover. Analysts surveyed by the Bloomberg news agency had previously been more optimistic for 2023 and had on average expected an operating profit of 236 million euros.

The high costs were already clearly reflected in the business figures in the first quarter. Sales rose by 23 percent year-on-year to 322 million euros, mainly thanks to business in the USA. However, operating profit - adjusted for the special effect - fell by 18 percent to just over 50 million euros. Net profit even slumped by 44 percent to a good 15 million euros.

Befesa explained the development primarily with the lower prices on the zinc market. On the other hand, zinc treatment and refining charges were 19 percent higher than in the previous year, and coking coal prices remained high. Most recently, they were 41 percent higher than a year earlier - with negative consequences for the steel dust business.

By contrast, the company saw some relief for gas and electricity. Prices fell and stabilized in the first quarter, it said. This had a positive impact on the aluminum salt slag business./stw/mis/jha/