Inflation, high interest rates, and geopolitical tensions had a negative impact on European demand in the first quarter of 2024. Nevertheless, ElvalHalcor managed to increase its volumes and decrease its net debt. To achieve the latter, which was one of its main targets, the company significantly reduced its working capital, through its successful management, and slowing down its investment program.
In Q1’24, the average price of aluminium stood at EUR 2,025/tn, the average price of copper was EUR 8,122/tn and the average price of zinc was EUR 2,547/tn. The accounting metal result amounted to losses of EUR 4.2 million. Adjusted consolidated earnings before interest, tax, depreciation, and amortization (a-EBITDA) amounted to EUR 48.7 million (-30.7% vs. Q1’23), mainly affected by the reduced conversion prices in the Aluminium segment.
To remain resilient in this adverse economic climate, ElvalHalcor focused mostly on CAPEX and small improvements in the Aluminium Segment, following the completion of the cold rolling mill and lacquering line investments in 2023. In the Copper Segment, the development of the investments that started in 2023 continue, with the aim to unlock incremental capacity and further growth for the segment. Despite the weak demand, the Aluminium Segment managed to increase its sales volumes, although the operational profitability of the segment dropped compared to the respective prior year period due to the reduced conversion prices, while the strong demand for Sofia Med’s products boosted the performance of the Copper Segment with the operational profitability of the segment standing at the same levels compared to Q1’23.
ElvalHalcor’s top executives of the two segments acknowledged the challenging geopolitical and financial conditions but also highlighted the facts that ensure the company’s positive future trajectory.
Commenting on the financial results of the first quarter of 2024, the General Manager of the Aluminium Segment, Nikolas Carabateas, stated, “Following the successful completion of our strategic investment plan of the Aluminium Division, ElvalHalcor succeeded in increasing volumes, compared to the corresponding quarter of 2023. Meanwhile, the improvement of Working Capital, as well as the slowdown of investments, led to a further reduction of the Net Debt of the Aluminium segment. The negative conditions that prevailed in global economic activity during Q1’24, such as the geopolitical situation and the macroeconomic environment, negatively affected specific segments of the economy, and particularly the foil segment, which was affected later but stronger by the economic conditions, and as a result on the profitability of the segment. We consistently continue to serve markets that reflect megatrends and the circular economy.”
Panos Lolos, General Manager of the Copper Segment, stated: “The Segment's operating profitability was resilient compared to the respective prior year period despite continued pressures from the construction sector and subdued industrial activity in Europe. The performance of our subsidiary Sofia Med was remarkable, exploiting its competitive advantages and continuing to increase market shares in rolled products through the development of innovative high-value-added products and industrial applications in line with global mega-trends. The Segment reduced net debt due to, among other reasons, low metal prices.”