LONDON Aurubis AG issued a profit warning after metals sales fell in its fiscal fourth quarter and scrap and acid markets remained problematic.
The Hamburg, Germany-based company said preliminary figures indicate a pretax loss of 233 million ($314.4 million) for the fiscal year ended Sept. 30 in contrast to earnings of 516 million in the same period a year earlier.
The loss was mainly due to negative valuation effects arising from a sharp drop in metals prices, but the companys overall performance was also weakened by unfavorable scrap and sulfuric acid markets.
The companys operating income stood at 111 million ($149.8 million) in its fiscal year compared with 296 million a year earlier.
Metals prices improved during the companys fiscal fourth quarter after nosediving in the previous quarter, leading to pretax earnings of 53 million ($71.5 million), while its operating result for the same period showed a 22 million ($29.7 million) loss as metal production dropped during large-scale maintenance at its Hamburg plant.
"The entire year was impacted by poor copper scrap and sulfuric acid markets as well as weak product markets, which continued to be affected by economic factors," Aurubis chief executive officer Peter Willbrandt told investors Nov. 5. "There were also negative valuation effects due to much lower precious metal prices. Furthermore, our two large projects in Hamburg and the restructuring of our flat products line weighed on earnings."
Aurubis expects some of those strains to ease in the next financial year as Hamburg returns to normal operations and the companys restructuring of its flat-rolled production division is completed, he said.
The company is set to publish its full results for the year Dec. 16.
A version of this article was first published in AMM sister publication Metal Bulletin.