Throughout the fourth quarter of 2023, global economic activity remained subdued across various sectors, despite a continuous decline in inflation. Energy prices remained moderate, with European gas consumption notably low due to factors such as a mild winter, shifts in consumer behaviour, and decreased industrial activity. Central banks maintained basic interest rates at elevated levels to mitigate inflation, amidst ongoing geopolitical tensions such as Russia's conflict. These factors have contributed to heightened uncertainty about short-term economic growth prospects.
In this uncertain economic climate globally, the performance of the ElvalHalcor Group for 2023 was robust. Although sales volume dropped by 4.6% compared to the respective period in 2022, it remained significantly higher compared to 2021. The aluminium segment sales volume, excluding the impact of Etem's deconsolidation from Q2'23, increased slightly by 0.4% (-1.6% including Etem).
Similarly, consolidated adjusted earnings before taxes, interest, depreciation and amortisation, metal result, and other exceptional items (a-EBITDA), which better reflect the operational profitability of the Group, declined by 11.8%, reaching EUR 239.3 million in 2023 versus EUR 271.2 million the previous year. Earnings were mainly affected by the lower spreads from recycling and inflationary cost pressures. Notably, a-EBITDA remained at a much higher level than that of 2021 (EUR 166.8 million).
Nikolas Carabateas, general manager of the aluminium segment, said that "the negative conditions that prevailed in global economic activity during the year remained in Q4 2023. However, as the gradual reduction in stock levels that started in Q4 2022 seems to have run itscourse, we succeeded in increasing volumes and profitability compared to the corresponding quarter of 2022, keeping them at satisfactory levels for the whole year, and higher than 2021. An exception to the quarter's performance was the flexible packaging sector, which was affected later and much more severely by the reduction in consumption. Our efforts to improve working capital continued to pay off."
Panos Lolos, general manager of the copper segment, commenting on the financial results, mentioned that "the last quarter of the year did not present any surprises for copper segment outcomes. Weakness in demand, particularly in the construction sector, persisted and affected volumes of copper tubes and alloy extrusions. The overall organic profitability of the sector, however, remained on an upward trajectory, driven again by the outperformance of our subsidiary Sofia Med against the market. We have now managed to rank high on the list of customers' choices as a result of our consistency, reliability and vision to establish ourselves among Europe's leading producers of copper rolled products and alloys in a sustainable manner".
Find the press release with all the financial and operational highlights of ElvalHalcor for 2023 here.