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Second quarter 2023 results: “Navigating successfully a recessionary European environment”

Aperam S.A. / Key word(s): Quarter Results
Second quarter 2023 results: “Navigating successfully a recessionary European environment”

27-Jul-2023 / 06:56 CET/CEST

Second quarter 2023 results1

 

“Navigating successfully a recessionary European environment”

 

Luxembourg, July 27, 2023 (07:00 CET) - Aperam (referred to as “Aperam” or the “Company”) (Amsterdam, Luxembourg, Paris, Brussels: APAM, NYRS: APEMY), announced today results for the three months ended June 30, 2023.
 

Highlights

  • Health and Safety: LTI frequency rate of 2.8x in Q2 2023 compared to 2.1x in Q1 2023
  • Shipments of 550 thousand tonnes in Q2 2023, a 7% decrease compared to shipments of 591 thousand tonnes in Q1 2023
  • EBITDA of EUR 103 million in Q2 2023, compared to EBITDA of EUR 127 million in Q1 2023
  • Net income of EUR 43 million in Q2 2023, compared to EUR 132 million in Q1 2023
  • Basic earnings per share of EUR 0.60 in Q2 2023, compared to EUR 1.83 in Q1 2023
  • Free cash flow before dividend and share buy-back amounted to EUR 1 million in Q2 2023, compared to EUR 85 million in Q1 2023
  • Net financial debt of EUR 461 million as of June 30, 2023, compared to EUR 419 million as of March 31, 2023     

 

Strategic initiatives

  • Leadership Journey®​2 Phase 4:​ Gains reached EUR 16 million in Q2 2023 and a cumulative EUR 150 million already reached the target gains of EUR 150 million over the period 2021 to 2023.

 

Prospects[1]

  • Q3 2023 EBITDA is expected to decrease versus Q2 2023
  • We guide for higher Q3 2023 net financial debt

 

Timoteo Di Maulo, CEO of Aperam, commented:

 

“We knew that the second quarter would be tough, but the actual situation in Europe has taken a turn for the worse. Persistent destocking caused demand at the seasonal peak to reach rock bottom and prices marked new all time lows. The resulting pressure on margins was further aggravated by substantial inventory valuation charges. In this perspective the second quarter demonstrates Aperam’s resilience through its differentiated value chain. Our Recycling, Alloys and Brazil operations performed solidly and added stability. We expect the environment to remain extremely challenging. Additional self-help measures will be our key focus in the coming months to strengthen competitiveness, increase flexibility and improve results on top of the Leadership JourneyⓇ.”

 

 

 

 

 

 

 

 

 

Financial Highlights (on the basis of financial information prepared under IFRS)

(in millions of Euros, unless otherwise stated)

Q2 23

Q1 23

Q2 22

H1 23

H1 22

Sales

1,702

1,876

2,457

3,578

4,722

Operating income

54

81

356

135

622

Net income attributable to equity holders of the parent

43

132

317

175

504

Basic earnings per share (EUR)

0.60

1.83

4.16

2.43

6.57

Diluted earnings per share (EUR)

0.59

1.83

4.15

2.41

6.55

 

 

 

 

 

 

Free cash flow before dividend and share buy-back

1

85

170

86

67

Net Financial Debt (at the end of the period)

461

419

571

461

571

 

 

 

 

 

 

Adj. EBITDA

103

127

402

230

765

Exceptional items

—

—

—

—

(53)

EBITDA

103

127

402

230

712

 

 

 

 

 

 

Adj. EBITDA/tonne (EUR)

187

215

633

202

585

EBITDA/tonne (EUR)

187

215

633

202

544

 

 

 

 

 

 

Shipments (000t)

550

591

635

1,141

1,308

 

Health & Safety results

 

Health and Safety performance based on Aperam personnel figures and contractors’ lost time injury frequency rate was 2.8x in the second quarter of 2023 compared to 2.1x in the first quarter of 2023.

 

Financial results analysis for the three-month period ending June 30, 2023

Sales for the second quarter of 2023 decreased by 9.3% at EUR 1,702 million compared to EUR 1,876 million for the first quarter of 2023. Shipments decreased from 591 thousand tonnes in the first quarter of 2023 to 550 thousand tonnes in the second quarter of 2023, due to an extremely low demand in Europe.

 

EBITDA decreased during the quarter to EUR 103 million from EUR 127 million predominantly due to a price / cost squeeze, significant inventory valuation charges and lower volumes.

 

Depreciation and amortization expense was EUR (49) million for the second quarter of 2023.

 

Aperam had an operating income for the second quarter of 2023 of EUR 54 million compared to an operating income of EUR 81 million for the previous quarter.

 

Financing costs, net, including the FX and derivatives result for the second quarter of 2023 were slightly negative at EUR (1) million. Cash cost of financing was EUR (7) million during the quarter.

 

Income tax expense was EUR (9) million during the second quarter of 2023.

 

The net result recorded by the Company was a profit of EUR 43 million for the second quarter of 2023, compared to a profit of EUR 132 million for the first quarter of 2023.

Cash flows from operations for the second quarter of 2023 were at EUR 63 million, including a working capital decrease of EUR 3 million. CAPEX for the second quarter was EUR (58) million.

 

Free cash flow before dividend and share buyback for the second quarter of 2023 amounted to EUR 1 million, compared to EUR 85 million for the first quarter of 2023.

During the second quarter of 2023, cash returns to shareholders amounted to EUR 36 million, consisting fully of dividend.

 

Operating segment results analysis

 

Stainless & Electrical Steel (1)

 

(in millions of Euros, unless otherwise stated)

Q2 23

Q1 23

Q2 22

H1 23

H1 22

Sales

1,050

1,233

1,643

2,283

3,166

EBITDA

52

80

328

132

600

Depreciation & amortization

(26)

(25)

(25)

(51)

(50)

Operating income

26

55

303

81

550

Steel shipments (000t)

373

399

432

772

877

Average steel selling price (EUR/t)

2,713

2,982

3,709

2,852

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