German metals recycling group Scholz has closed 2015 with a post-tax loss of €232m, according to figures released on 18 August. This marks a further decline compared to the company’s 2014 net loss of €123m. The operating result was also significantly lower than in the year before. Earnings before interest, tax, depreciation and amortisation (Ebitda) stood at €70.5m, down 23 per cent compared to the 2014 Ebitda of €91.3m.
Scholz’s management attributes the decrease mainly to the sharp drop in ferrous scrap prices, which nearly halved between June and November 2015. Because of the difficult market environment and the divestment of assets under the company’s restructuring strategy, the scrap tonnage handled by Scholz contracted 13 per cent from 8.33 million tonnes to 7.24 million tonnes. The drop in prices meant that the decrease in revenue was more pronounced, with revenue falling 27 per cent from €3.12bn in 2014 to €2.29bn last year.
Scholz’s net debt totalled €960m at the end of 2015. The Chinese Chiho Tiande Group (CTG) acquired a significant share of it in July and thus became the company's largest single creditor when it purchased a €524m package of Scholz debt held by various banks. Furthermore, CTG says it will provide a bridge loan of €80m and fund a €16m payment to Scholz bondholders. The Chinese company plans to take over Scholz and reduce the company’s debt to less than €500m by waiving part of it. However, CTG underlines that it has not entered into any definitive agreement yet as regards the takeover.
