Aurubis: Q3 preview - metals & sulfuric acid starting to kick in

Research evidence excerpt

Aurubis: Q3 preview - metals & sulfuric acid starting to kick in

hare price. Although valuation levels of ~7x EV/EBITDA valuation levels) to reflect the growing

2026/27E have moved well above mid-cycle levels (sub-6x) and the market perception of Aurubis as a circular

economy stock. Assumptions in our DCF (including record-low TC/RCs) could continue to drive volatility, we would not rule

model include a WACC of 8% (based on a

out the strength lasting in the near term if market tailwinds persist. In our view, the beta of 1.1, 3.5% RFR and 6% ERP) and a

shares offer a balanced risk/reward profile; Hold. terminal growth rate of 2% to reflect the

limited growth potential.

Q3 results due on 06 August

Aurubis is due to report Q3 results, and although the quarter should again include Risks to both the upside and downside

include demand/supply and prices that

several moving parts, we expect a further sequential improvement in underlying

deviate from our current scenario

earnings driven by high contributions from the metal result, strong sulfuric acid (particularly copper and copper scrap

prices and realized scrap RCs, which should more than offset the negative impact supply, sulfuric acid prices, copper and

from the maintenance break at the Lünen recycling smelter (c.E10m). We forecast gold). Production disruptions and material

operating EBT of E151m, which should translate into net income of E116m. Given capex changes are further risks on the up-

and downside. Should the metal price rally

the usual seasonal working-capital build, we expect net debt to increase to E0.45bn

last and management be able to maintain a GMTGMT from c.E0.36bn in Q2, before a strong final quarter should support a yoy decline in higher-than-expected level of earnings

net debt to c.E0.09bn.