Aurubis Drops Most in 17 Years as Sales Slump on Copper Rout

  • Revenues hit by lower copper prices as Chinese demand slows
  • Smelter cites `disappointing' global demand for metal

Aurubis AG slumped the most in almost 17 years after Europe’s biggest copper smelter said fourth-quarter revenue fell amid lower metal prices and that earnings will probably decline this year.

Sales in the three months through September dropped 14 percent from a year earlier, the Hamburg-based company said in a statement Friday. Global demand for copper products was "disappointing" in the last fiscal year, it said. The shares slid 19 percent in Frankfurt to the lowest level since January.

Aurubis, the world’s third-largest refined copper producer, is among companies contending with slowing demand in top consumer China that’s adding to oversupplies of metal. Copper is heading for the biggest annual drop since the global financial crisis in 2008 and is near a six-year low. Aurubis’s operating pretax profit will probably fall more than 10 percent in the year through next September, interim Chief Executive Officer Erwin Faust told reporters in Hamburg.

"Weaker demand resulted first and foremost from lower Chinese copper demand," Aurubis said in the statement. “Demand momentum from Europe and the U.S. was not able to compensate.”

The stock closed at 46.79 euros in Frankfurt, valuing the company at about $2.3 billion.

Fourth-quarter revenue declined to 2.53 billion euros ($2.78 billion), while operating pretax profit rose 32 percent to 82 million, Aurubis said. A “good” availability of copper concentrate, which it smelts and refines, led to considerably higher discounts from miners, known as treatment and refining charges, it said.

The company doesn’t see a takeover by anchor shareholder Salzgitter AG, which holds a 25 percent stake, in the short or medium term, Faust said. Juergen Schachler, the company’s incoming CEO, will start on July 1 instead of April 1 as previously envisaged, the company said.

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