Executive Board assessment of the Aurubis Group during fiscal year 2018/19
Operating earnings before taxes amounted to € 192 million in fiscal year 2018/19. This result is significantly below that of the particularly successful previous year (€ 329 million), in which we achieved one of the best results in the history of the Aurubis Group. By the end of the reporting year, operating ROCE reached a value of 8.6 % (previous year: 15.0 %).
In the Annual Report 2017/18, we published the following forecast: in total, we expected the Aurubis Group to report operating EBT at a level moderately below that of the previous year, and operating ROCE slightly below that of the previous year. On April 26, 2019, we adjusted this forecast: accordingly, from that point on, Aurubis AG expected significantly lower operating EBT compared with the previous year (reduction: > 15.0 %), and significantly lower ROCE (reduction: > 4.0 percentage points). This result means that both operating consolidated EBT and operating ROCE were within the adjusted forecast.
The development of operating EBT was influenced considerably by planned and unplanned shutdowns at our smelter sites. Most notably, these led to substantially lower concentrate throughputs, and consequently to lower refining charges. In addition to this, a redefinition of our operating result led to recognition of an ongoing imparment loss of € 31 million against copper inventories. A € 20 million impairment loss recognized against Segment FRP’s non-current assets, as well as the discontinuation of our investment project Future Complex Metallurgy, also had a negative effect on the operating result. Furthermore, increased energy costs and weaker demand for continuous cast and flat rolled products had a detrimental influence on the outcome of the result in the reporting year.
The operating result in fiscal year 2018/19 was affected favorably by increased metal output in Q4 and sales of precious metals, which took advantage of high prices for precious metals. Added to this, significantly higher prices for sulfuric acid resulted in higher sulfuric acid revenues, despite a diminished output due to production shutdowns. Positive contributions from our efficiency improvement program, as well as a receivable from Wieland-Werke AG arising from the prohibited sale of Segment FRP also had a beneficial influence.
At € 304 million, the operating EBT for Segment Metal Refining & Processing (MRP) in the reporting period remained below that of the particularly successful previous year (previous year: € 353 million). The description of the Group business performance also largely applies to that of Segment MRP.
Operating EBT for Segment FRP amounted to € -47 million for the reporting period (previous year: € 21 million). Operating EBT was detrimentally affected both by the redefinition of operating EBT, as previously mentioned in the observations on the Group, and by an impairment loss recognized against Segment FRP’s non-current assets. Without these factors, the operating result before taxes would have been marginally positive (€ +4 million).
At € 272 million, the operating net cash flow as at September 30, 2019 exceeded that of the previous year (previous year: € 203 million). This was primarily due to the sales of precious metals at increased prices.
The equity ratio (operating) was 55.0 % as at September 30, 2019 (previous year: 55.5 %). Net surplus financial funds as at September 30, 2019 were at € 139 million (previous year: € 165 million). The Aurubis Group’s balance sheet structure thus continues to be very robust.