Half year results 2018

Results first half 2018: Continued good results in volatile market conditions

Regulated information - 27 September 2018 – 18:00

Headlines

During the first semester of 2018 Campine achieved a revenue of 113.8 Mio € (2017: 116.5 Mio €). Profit after taxes amounted to 4.67 Mio €, (2017: 4.98 Mio €). The slight reduction in Sales (-2.3%) and profit (‑6.2%) are solely related to the volatile and lower lead prices in 2018.

“The metal markets have been more volatile in 2018 due to threats of trade wars” explains CEO De Vos and adds that “Despite similar average metal prices in the first half of 2017, the LME lead price in 2018 showed a downward trend. In combination with increased used-battery purchase prices, this has a short term negative impact on margins.” Campine confirms that since August battery prices are lowering and availability improves. In combination with the new lead furnace filter and related increased output capacity, Campine is looking forward to a positive second semester with good filled orderbooks for all businesses.

Re-aligned Business Units

Campine has aligned its business organisation into 2 segments in conformance with its markets served. This orientation also fits with our internal management structure says De Vos: “The Plastics and Antimony Business Units are serving the same customers, often even for the same applications, so it is logical to bring them in one Segment called Specialty Chemicals. In May 2018 the company announced its new business plan, in which it confirmed also to increasingly recycle other metals besides Lead. “What started as an attempt to recover antimony from our drosses and other industrial waste streams, resulted in the recovery, concentration or extraction of different other metals. The metallurgical process to do this and the suppliers and customers involved, are more linked to our lead recycling operations, so these businesses fit very well under the Segment header of Metals Recycling” adds De Vos.

Specialty Chemicals hosts all businesses which serve end-markets with chemical products and derivates. The manufacturing of antimony trioxide used as flame-retardant, polymerization catalyst and pigment reagent (formerly reported under the Antimony unit) and the production of different types of polymer and plastic masterbatches (formerly reported under BU Plastics) are hosted in this Segment, which now comprises the BU Antimony and BU Plastics.

Metals Recycling hosts the businesses in which metals are being recovered from industrial and post-consumer waste streams. The main activity is the manufacturing of lead alloys (formerly reported in the BU Lead). To this business is now added the growing activity of the recycling of other metals such as antimony and tin (formerly integrated in the BU Antimony). This Segment now comprises the BU Lead and BU Metals Recovery.

The financial reporting is adapted according to this modification.

Performances per Segment

Specialty Chemicals

Market and Operations

The demand for flame retardants continues to increase. Despite regulatory pressure, antimony trioxide remains the most widely used and most efficient product in the fire protection of plastics.
Sales volumes increased to 8,078 mT compared to 7,855 mT over the same period in 2017, which is an increase of 3 %. Demand remains strong for the rest of the year.
The operating result improved substantially to 2.70 Mio € (from 1.20 Mio € in 2017), due to increased operational efficiencies.
Campine keeps expanding its range of plastic masterbatches with the addition of a 4th mixing unit.

Outlook 2018The demand for Campine’s chemical products remains strong. The expectation is that the Specialty Chemicals Segment will continue to perform better than in 2017 throughout the year.

Metals Recycling

Market and Operations

The demand for Lead products remains high and similar to last year. Sales volumes in the first semester were however about 1,120 mT below last year’s first semester (30,469 mT versus 31,585 mT). This was caused by capacity limitations related to the old filter, which was replaced during the summer shutdown. The new furnace filter (building) was taken into operation as planned on August 1st and gives Campine about 15% additional lead recycling capacity.
LME lead prices were very volatile. The average LME lead prices of the first 6 months 2018 were comparable with those of the first semester 2017. However there are some substantial differences: In 2017 LME lead prices started relatively low around 1,900 €/mT and increased thereafter. In 2018 LME lead prices started relatively high (2,100 €/mT) and dropped considerably by begin of March towards 1,900 €/mT after president Trump’s announcement of metal import duties. Prices remained very volatile since then, even reaching 1,700 €/mT in September.
The operating result reduced accordingly to 6,245 Mio € (from 8,897 Mio € in 2017).
Our process knowledge to recycle other metals such as antimony and tin has reached a more mature stage, allowing us to run our equipment more efficiently.

Outlook 2018The increased capacity will be gradually filled during Q3 and we expect a strong output during Q4 to satisfy the high market demand. Campine expects the Metals Recycling Segment to end the year 2018 with similar or even higher volumes than in 2017. Margins are progressively restoring as used-battery prices are adapting to the lowered lead LME rates.

The full press release and interim financial report can be found in annex and are available on our website

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