Befesa SA based in Luxembourg, a leading provider of hazardous waste recycling services to the steel and aluminum industries, says it posted its best quarterly results in its 35-year history, with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA ) of the first quarter of 61.1 million euros, or $64.4 million. The figure was 25% higher than the company’s first-quarter 2021 EBITDA of €48.8 million, or $51.5 million, and supports a positive business outlook for fiscal year 2022, said Befesa.
The positive year-over-year earnings performance for the quarter was primarily driven by strong base metal prices and strong volume performance, the company said. This included contribution from its U.S. zinc operations and initial volume from its first plant in China, which more than offset energy inflation and higher zinc processing (TC) charges of $230 per ton. metric. Overall plant utilization was at pre-pandemic levels of 88% for steel dust and 80% for aluminum salt slag and SPL (spent liner). Zinc prices on the London Metal Exchange (LME) averaged €3,337 per metric ton, or $3,518, in the first quarter (up 46% from the first quarter of 2021). Aluminum alloy prices also traded at the highest levels on record and rose 33% from the first quarter of 2021 to 2,627 euros, or nearly $2,770, per metric ton.
During the first three months of 2022, Befesa claims to have continued its hedging rigor and sold more forward zinc volume, until January 2025 inclusive.
Befesa’s expansion in China continued to progress while managing COVID restrictions. Its first factory in Jiangsu has been in commercial production since December last year, selling waelz oxide (WOX). Commissioning of the second plant in Henan began in January this year, with ramp-up expected in the second quarter and commercial production scheduled for the second half, according to the company.
Looking ahead, Befesa expects to achieve double-digit profit growth again in 2022, driven by the execution of its expansion plans and supported by the resilience of its business, its diversified global presence and its cash management. . The company says it expects 2022 EBITDA to be between €220 million and €270 million, or $232 million to $285 million, or growth of 11% to 37 % year over year. The company says its wide forecast range is determined by volatility in market prices (volume), energy and base metals.
Javier Molina, CEO of Befesa, said: “Our clients and our business are facing a market environment of very high volatility. Fortunately, Befesa started this difficult year in the best financial and strategic shape. Our key growth initiatives in the United States and China are bearing fruit. Our conservative hedging approach and long-term capital structure protect the proposed dividends and funding of our growth roadmap.
Befesa has facilities in Germany, Spain, Sweden, France, Turkey, South Korea, China and the United States. Through its two business units, Steel Dust and Aluminum Salt Slag Recycling Services, the company manages and recycles more than 2 million metric tons of scrap annually. .