LONDON A combination of higher lead scrap prices and maintenance shutdowns at two German operations led Recylex SA to record a net loss in the first half of the year.
"The groups interim results were impacted by scheduled maintenance shutdowns at the two major plants in the lead and zinc segments, which had a severe impact on earnings, as well as intense competition in scrap supplies which penalized margins in the lead business in particular," Recylex chairman and chief executive officer Yves Roche said.
The French lead and zinc recycler posted a net loss of 15.9 million ($21.1 million) for the six months ended June 30, nearly 10 times the 1.6-million net loss seen in the same year-ago period, on revenue that fell 9.9 percent to 209.4 million ($276.8 million), the company said Aug. 29.
Recylexs zinc business saw sales slip 3.2 percent to 39.1 million ($51.9 million), while operating income fell 40.6 percent to 1.9 million ($2.5 million) from 3.2 million a year earlier due to a six-week maintenance shutdown at its Harz-Metall Waelz GmbH oxide processing plant in Goslar, Germany.
The company also overhauled its Nordenham lead smelter in Germany over the past two years to protect margins and boost production, resulting in stable output during the six-month period despite a three-week maintenance outage in the third quarter. The plant posted an operating loss of 13.1 million ($17.4 million) in the first half, up from a 2-million operating loss in the same year-ago period.
Recylex in June announced plans to shut a secondary lead smelter in Belgium in response to lead scrap competition that led the plant to be a loss-making operation.
Recylex produced 69,973 tonnes of lead in the first half, down 11.2 percent from 78,836 tonnes a year earlier.