Earnings Release • Apr 28, 2016
Earnings Release
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Suresnes, April 28, 2016: the Recylex Group (Euronext Paris: FR0000120388 - RX) has today reported its financial information for the first quarter of 2016.
Consolidated sales for the three-month period to March 31, 2016 totaled €92.5 million, down 13% on the first three months of 2015, breaking down as follows:
| (€ million) | Three months to March 31, 2016 |
Three months to March 31, 2015 |
Change (%) |
|---|---|---|---|
| Lead | 68.9 | 75.9 | -9% |
| Zinc | 15.5 | 19.4 | -20% |
| Special Metals | 3.9 | 6.4 | -39% |
| Plastics | 4.2 | 4.8 | -13% |
| Total | 92.5 | 106.5 | -13% |
" The negotiations concerning the financing search for the German perimeter have well progressed during these last days but have not yet reached a sufficiently advanced stage for Recylex SA to issue its 2015 financial statements. These negotiations remain the Group's top priority with a view to completing them by the end of the first half of 2016. From a business perspective, the adverse trend in metals prices compared with the first quarter of 2015 was the main factor behind the decline in our first-quarter 2016 sales. With the mild weather conditions during the winter, scrap batteries availability on the market was very low. As a result, we continued to pursue our selective purchasing policy to protect our margins and our cash. In the second quarter of 2016, we should benefit from the current rise in metals prices and from a favorable comparison base as a result of scheduled maintenance shutdowns in the Lead and Zinc segments in Germany operated during the second quarter of 2015."
Lead prices were highly volatile between January 2, 2016 and March 31, 2016. Over the period, they recorded a substantial fall of over 7%. They gradually recovered between January and February 2016, before taking another tumble in March 2016. Over the same period, zinc prices moved 10% higher. Since hitting a low in late January 2016, they have picked up almost continuously.
The average lead price in the first quarter of 2016 was 1.4% lower than in Q1 2015. In addition, the average zinc price over the same period was close to 18% lower than in Q1 2015. Average prices for the three-month period to end-March were as follows:
| (€ per tonne) | Three months to March 31, 2016 |
Three months to March 31, 2015 |
Change (%) |
|---|---|---|---|
| Lead price | 1,582 | 1,605 | -1.4% |
| Zinc price | 1,522 | 1,848 | -17.6% |
Between January 2 and March 31, 2016, the €/\$ exchange rate sank from 1.2039 to 1.0883, representing a decrease of around 10% over the period, continuing the trend seen since 2015.
The average €/\$ exchange rate declined 2% from 1.1262 in the first quarter of 2015 to 1.1022 in the first quarter of 2016.
Consolidated sales in the first three months of 2016 came to €92.5 million, down 13% compared with the same period of 2015.
In the first three months of 2016, Lead sales accounted for 74% of consolidated sales.
During the first quarter of 2016, production at the Nordenham smelter totaled 28,965 tonnes, down 11% from 32,614 tonnes in the first three months of 2015.
With materials for recycling in short supply owing to the very mild winter weather, the Group continued to pursue its selective purchasing policy for scrap batteries.
As a result, the segment's sales dropped 9% to €68.9 million.
Zinc accounted for 17% of the Group's consolidated sales in the first three months of 2016.
In the first quarter of 2016, they totaled €15.5 million, down 20% compared with the same period of 2015. Restated to include the Group's share of 50%-owned Recytech SA's sales, the segment's sales came to €19.3 million, down an identical 20% from €24.0 million in the same period of 2015. The steep fall in zinc prices was chiefly to blame for this unfavorable trend.
Sales recorded by the electric arc furnace dust recycling business declined in line with the average fall in zinc prices. Total Waelz oxide production by the Harz-Metall GmbH subsidiary and (50%-owned) Recytech SA was stable at 18,882 tonnes in the first quarter of 2016, up from 18,698 tonnes in the corresponding quarter of 2015.
The zinc recycling business was impacted by an unfavorable trend in selling prices with the decline in zinc prices over the period and by the reduced availability of materials for recycling, which generated a strong increase in purchasing prices. Zinc oxide production by the German Norzinco GmbH subsidiary was stable at 6,060 tonnes in the first quarter of 2016, compared with 6,136 tonnes in the first quarter of 2015.
Special Metals contributed 4% of the Group's consolidated sales in the first quarter of 2016.
PPM Pure Metals GmbH reported sales of €3.9 million, down 39% on the first quarter of 2015. This strong decline was chiefly attributable to a fall in germanium sales volumes since the fiber optics market was very sluggish in the first quarter of 2016.
Plastics sales accounted for 5% of consolidated sales in the first three months of 2016.
They totaled €4.2 million, down 13% compared with the first quarter of 2015. The diversification of the customer portfolio was not sufficient to make up entirely for the decline in sales volumes. With very low oil prices, the cost of primary commodities is now more attractive than that of recycled materials in many sectors of activity.
During the period, the segment's total production of recycled polypropylene dropped 16% to 4,005 tonnes from 4,780 tonnes in the first quarter of 2015.
Discussions concerning the global financing package searched by the Group's German subsidiaries to finance the new production unit project in the Lead segment and cover their working capital requirement have well progressed, but have not yet reached a sufficiently advanced stage for Recylex SA's Board of Directors to be able to approve the consolidated financial statements for the year ended December 31, 2015 on a going concern basis (see press release dated March 24, 2016).
These discussions include refinancing for a €3 million credit line provided for the Group's German businesses. The due date for its repayment has now been postponed until May 31, 2016.
Recylex SA will release an update as soon as possible on progress towards arranging the requisite financing and its new reporting schedule, including the revised dates for publication of its 2015 annual financial statements and for the Annual General Meeting of its shareholders.
Please refer to the document summarizing the development of legal proceedings concerning Recylex SA and Metaleurop Nord SAS on the Recylex Group website (www.recylex.fr – News – Legal proceedings schedule).
With operations in France, Germany and Belgium, Recylex is a European group specialized in lead and plastics recycling (mainly from automotive and industrial batteries), zinc recycling (from electric arc furnace dust and zinc scrap) and the production of special metals, primarily for the electronics industry.
A key player in the circular economy with long-standing expertise in urban waste recovery, the Group has close to 680 employees in Europe and generated consolidated sales of €385 million in 2015.
For more information about Recylex Group: www.recylex.fr and on twitter: @Recylex
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Press/Investor contact: Gabriel ZEITLIN + 33 (0)1 58 47 29 89 [email protected]
| (€ per tonne) | First quarter 2016 |
First quarter 2015 |
Annual average 2015 |
|---|---|---|---|
| Lead price | 1,582 | 1,605 | 1,608 |
| Zinc price | 1,522 | 1,848 | 1,737 |
| (€ million) | Three months to March 31, 2016 |
Three months to March 31, 2015 |
Change (%) |
|---|---|---|---|
| Lead segment | 13.7 | 18.3 | -25% |
| Services to Group companies |
0.3 | 0.4 | -20% |
| Total sales | 14.0 | 18.7 | -25% |
Disclaimer: This press release may contain forward-looking statements that do not constitute forecasts regarding results or any other performance indicator, but rather trends or targets. These statements are by their nature subject to risks and uncertainties as described in the Company's annual report available on its website (www.recylex.fr). Further information about Recylex is available from its website (www.recylex.fr)
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