Umicore SA (UMI), the world’s largest precious-metals recycler, fell the most in 11 weeks in Brussels after forecasting a steeper profit drop than most analysts projected because of lower metal prices and persistent weak demand for catalysts and building products in Europe.
Umicore dropped as much as 5 percent on Euronext Brussels, the biggest intraday drop since Feb. 7, and traded 1.32 euros lower at 33.38 euros by 9:04 a.m. local time. The shares have lost 19 percent in the past 12 months.
Earnings before interest, tax and special items will drop to about 315 million euros ($413 million), plus or minus 15 million euros, from 372.1 million euros last year, the Brussels- based company said today in a statement. That fell short of the 351.5 million-euro average of 15 analyst estimates compiled by Bloomberg.
“Consensus estimates should be revised down about 7.5 percent to the top end of the guidance,” Filip De Pauw, an analyst at ING Groep NV in Brussels, wrote in an investor note. “The latter comes on top of the downside risk on recycling profitability due to lower metal prices.”
European car sales are heading for a 20-year low after contracting 9.7 percent in the first quarter and Umicore said consumers are trading down to smaller vehicles with fewer diesel engines, the most profitable segment in the automotive catalyst industry. Lower prices for specialty metals such as tellurium and rhodium, which can’t be hedged, curbed recycling profit, while Umicore locked in some precious-metal prices before they dropped.
Precious metal prices fell 1.4 percent on average so far this year from the same period a year earlier, based on the Bloomberg precious metals spot price index that tracks prices of platinum, gold, palladium and silver. The gauge closed at 387.12 yesterday, 6.2 percent lower than 12 months ago.
Umicore also said net debt fell to “well below” 200 million euros at the end of March from 222.5 million euros at the end of last year.
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