Recylex with improved results

Consolidated sales in the first six months of 2017 came to €218.3 million, up 30% on the level posted in the same period of 2016, chiefly as a result of higher lead and zinc prices.
I-vista, pixelio.de
I-vista, pixelio.de

Restated (to include the Group’s share of 50%-owned Recytech’s sales) consolidated sales for the six months to June 30, 2017 totaled €230.0 million, up 31% compared with the same period of 2016.

Despite the unfavorable base of comparison given the major scheduled maintenance shutdowns in the Lead and Zinc segments during the second quarter of 2017 (vs. no shutdown in 2016), the Group’s operating performance improved significantly, chiefly owing to the far higher profitability of the Lead and Zinc segments in the first half of 2017 as a result of:

Recylex’s consolidated net income attributable to equity holders of the parent came to €6.7 million in the first half of 2017, a significant improvement of €11 million on the first-half 2016 loss of €4.2 million.

Lead segment

The Lead segment’s first-half 2017 sales totaled €151.4 million, up 27% compared with the first half of 2016. Despite an unfavorable base of comparison linked to the maintenance shutdown of the smelter in the first half of 2017 (vs. no maintenance shutdowns in 2016), the segment posted a good performance thanks to the rally in lead prices and a robust level of lead production in the first half of 2017.

The plants in France and Germany recycled 68,800 tonnes of used lead-acid batteries (ULAB) – a 30% increase on the 53,000 tonnes in the same period of 2016, thanks to the increased availability of materials for recycling by comparison with the first half of 2016.Production by the Weser-Metall GmbH smelter reached 57,358 tonnes in the first half of 2017, an increase of 10% on the 52,011 tonnes recorded in the same period of 2016, despite the smelter’s maintenance shutdown during the first half of 2017.

The Lead segment’s operating income before non-recurring items under IFRS rose sharply in the first half of 2017, to €3.8 million, compared with a loss of €4.1 million in the first six months of 2016. Restated operating income before non-recurring items2 for the same period came to €4.8 million, compared with a loss of €3.9 million in the first half of 2016.

The upturn in lead prices and higher battery volumes processed helped to improve the segment’s margins over the period.

Thanks to the bank loans arranged in December 2016, the Group began the construction in January 2017 of the Weser-Metall GmbH subsidiary’s new reduction furnace in Germany.

The aim of this investment of approximately €40 million is to restore the Lead segment’s profitability over the long term by recovering more of the lead content from the input materials. Work continues on schedule, and the furnace is expected to be commissioned in the first half of 2018.

Zinc segment

The Zinc segment’s sales totaled €52.4 million in the first half of 2017, representing a very strong increase of 62% compared with the first half of 2016. Restated2 to include the Group’s share of 50%-owned Recytech SA’s sales, the segment’s sales came to €64.1million, representing an identical percentage increase.

This increase was chiefly attributable to the strong rise in zinc prices compared with the first half of 2016, which helped to offset the impact of the scheduled shutdown for maintenance by the Harz-Metall GmbH plant in the first half of 2017 (vs. no maintenance shutdown in 2016).

The Group’s total Waelz oxide production by the Harz-Metall GmbH subsidiary and (50%- owned) Recytech SA reached 35,273 tonnes in the first six months of 2017 from 34,884 tonnes in the first half of 2016. Norzinco GmbH’s zinc oxide production rose 7% to 12,564 tonnes in the first half of 2017 from 11,716 tonnes in the equivalent period of 2016.

Special Metals segment

The Special Metals segment’s first-half 2017 sales totaled €7.2 million, down 10% on their level in the first half of 2016. This fall was chiefly attributable to the strong decline in germanium and gallium sales, despite firm arsenic sales.

Plastics segment

The Plastics segment’s first-half 2017 sales totaled €7.3 million, down 13% on the level recorded in the first half of 2016. The segment’s total production dropped 10% to 7,128 tonnes of recycled polypropylene in the first half of 2017 from 7,933 tonnes in the corresponding period of 2016.

Given weaker demand, especially from the automotive industry, and competition from virgin materials owing to the low level of oil prices, the segment’s operating performance before non- recurring items was at breakeven in the first six months of 2017. In the first half of 2016, it had recorded modest operating income before non-recurring items of €0.2 million.

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