Now Amag also has to give up profits

Domestic aluminum groups saw a decline in sales and profits in the first half of the year.

Lately, it may cause less trouble for your major shareholder, B&C Private Foundation, than many other investments – Keywords Lenzing – did. Nevertheless, aluminum companies had to Mould It will also be abandoned in the first half of 2024. Compared with the same period last year, sales (minus 11.1%) and earnings fell significantly. However, a profit of 33.4 million euros was still achieved after six months, while the profit in the first half of 2023 was 51 million euros.

The company benefited from higher aluminum prices on global markets in the second quarter. It helped the group to mitigate the sluggish demand for rolled products in certain sectors. For example, sales in the packaging sector declined, as did the automotive industry. The company is particularly well positioned in this regard, as Amag board member Helmut Kaufmann explained on Thursday. They “are not only dependent on the German automotive industry, but also supply Asian and American manufacturers,” Kaufmann said. The company also does not see electric vehicles competing with combustion engines; it offers cars with both drive types.

Increased prognosis

However, the company was able to raise the lower limit of its full-year earnings forecast from 150 to 160 to 180 million euros, independent of the significantly more favorable outlook for the second half of the year. But CFO Claudia Trampitsch said the business situation could now be assessed better than in March. Traditionally, aluminum companies have noticeably weaker business in the second half of the year because there are always two major planned maintenance stoppages – one in the summer and one at Christmas. However, volumes are still increasing despite the planned outages. Nevertheless, the economic environment remains challenging. European market sentiment is clouded.

High KV qualification

Kaufmann says last year’s Austrian KV contract should not be ignored, nor should energy prices. “These are factors that we have to factor into our product calculations one way or another. It is also unrealistic to achieve such a large productivity increase quickly with a 10% wage increase.” “We are therefore focusing more on special products,” Kaufmann says. Because when awarding contracts, you are not necessarily subject to price wars; quality and expertise are important. However, you cannot enforce your own prices everywhere, and you already have multi-year contracts with many customers.

Kaufman said, “The Chinese are cheap, we are smart,” which is a phrase that people often said arrogantly in the past. But “Today’s Chinese are both cheap and smart; that’s a stupid combination for us,” the board said. You have to adapt to local conditions, but all we can say is: “Dear politicians, do something.”

Amag also owns 20% of Canadian aluminum company Alouette, so it can benefit from rising aluminum prices, such as in the second quarter. However, the recent rise in alumina prices will soon have an impact. The plant contributed about half of the first half results. (New Standard)