(New: Salzgitter adjusts outlook)
HAMBURG (dpa-AFX) - The alleged fraud of individual scrap suppliers is burdening copper group Aurubis with a low three-digit million sum. After taking stock, the Hamburg-based company as well as its major shareholder Salzgitter have new forecasts for the current fiscal year. After the cases became known, the two groups had initially withdrawn their forecasts. Both shares rose on Tuesday afternoon.
Aurubis expects a charge of around 150 million euros, the MDax company announced in Hamburg. The announced extraordinary inventory of metal stocks had resulted in a shortfall worth 185 million euros, which will burden fiscal year 2022/23, which runs until the end of September. Insurance payments and a possible collection of perpetrator funds are expected to reduce the total by a further 30 million euros. Therefore, and in view of the economic development in the fourth fiscal quarter, Aurubis expects operating earnings before taxes of between € 310 million and € 350 million in 2022/23.
Aurubis shares rose on the news, leading the MDax in the afternoon with a gain of 3.4 percent to 69.68 euros. "With the ad hoc announcement, the uncertainty is out for now and the chapter is closed for the capital market. The damage is not even a negative surprise," commented stock expert Frederik Altmann of Alpha Wertpapierhandel.
At the end of August, the Hamburg-based company had identified significant deviations in metal inventories from target inventories, as well as deviations in special samples of certain deliveries of input materials in the recycling sector. This is likely to be the result of further criminal acts beyond those disclosed in June 2023, it had been said. The state criminal investigation office had been called in.
At the time, the group had also suspended its annual forecast of a pre-tax operating profit of 450 to 550 million euros. The shares had then slumped by almost a fifth to 62.50 euros, but had recently recovered a good deal.
Against the background of the new Aurubis forecast, Salzgitter AG also presented a new outlook. The steelmaker holds around 30 percent of the shares and had also suspended its annual profit target due to the Aurubis uncertainties.
Salzgitter now anticipates earnings before interest, taxes, depreciation and amortization of between €650 million and €700 million for 2023. Before the suspension, the company had held out the prospect of 750 million to 850 million euros. Pre-tax profit is expected to reach 200 million to 250 million euros, compared with the previously announced 300 million to 400 million euros.
The shares, listed in the small-cap segment SDax, were last quoted 1.6 percent up at 24.76 euros.
According to Aurubis, it is now "certain knowledge that deliveries and samples for input materials in the recycling sector with high contents of valuable metals were manipulated to Aurubis' detriment." As a result, overcharged invoices had been paid, despite industry-standard safety standards. However, it was not yet possible to say which suppliers were affected. The company had called in the State Criminal Investigation Office, which is still investigating.
However, it could be ruled out that Aurubis customers and deliveries to them were affected by the fraud case, the statement continued.
In order to prevent the incident from happening again, Group CEO Roland Harings now wants to implement "process improvements and further security measures". Details could be provided on December 6 in the course of the publication of the annual figures.
As Aurubis had already emphasized recently, the financial damage will not affect the expansion plans. As has been known for some time, the Hamburg-based company plans to invest around € 1.1 billion in the USA, Bulgaria and Germany by 2026. The largest profit contribution of the current growth projects is then to be made by the recycling plant in Richmond (USA), where production is to start later in 2024. Scrap metal recycling is booming in the USA.
And battery recycling, which is becoming increasingly important in times of electromobility, is also moving into focus at Aurubis. The review is underway. However, a decision will probably only be made in the medium term./mis/knd/nas/mis