FRANKFURT (Reuters) - Aurubis, Europe’s largest copper producer, on Friday cut its annual targets, citing factors such as a slower economy and maintenance shutdowns, sending its shares sharply lower.
“We expect a continued decline in the product markets due to the general economic trend, especially in the automotive sector,” Chief Executive Juergen Schachler said in a statement.
“The current fiscal year is a transitional year for Aurubis as we invest intensively in our production,” he added.
Aurubis now expects operating pretax earnings in its fiscal 2018/19 to decrease “significantly”, or by more than 15 percent compared to the previous year. In February, Aurubis had forecast full-year operating earnings before tax to be “moderately lower”.
Shares closed down 6.8 percent, its worst day since late November.
In the second quarter, Aurubis reported an operating pretax earnings 63 million euros ($70 million), down from 107 million reached in the year-earlier period. The quarterly earnings include a one-off income of 20 million from the rejected sale of a business to Wieland.
Aurubis also cited lower throughput, partly due to maintenance shutdowns, as well as a corresponding inventory build-up, lower refining charges for copper scrap and weaker demand for flat rolled products as factors which are weighing on its business.
Unscheduled shutdowns already affected its first-quarter earnings.
Reporting by Arno Schuetze; Editing by Michelle Martin and Louise Heavens