Scholz 2019 figures reflect lower demand and falling prices

15.04.2020 − 

The German ferrous and non-ferrous metals recycler Scholz posted lower revenue and earnings figures for 2019. The firm’s Chinese parent company, Chiho Environmental Group, reported that revenues of HKD 12.17bn were generated by its European business in the reporting year. This was a decline of nearly 20 per cent at current exchange rates or 15 per cent in local-currency terms, the group said on 30 March. Earnings in the segment amounted to HKD 380m, down by 14 per cent year-on-year at current exchange rates. In local-currency terms, the drop was said to be only 7 per cent.

Based on current exchange rates, these figures would correspond to revenues of around €1.4bn and earnings of approximately €44m. However, the company told EUWID that the published figures cannot be translated directly into euros. The results were consolidated according to the guidelines of the Hong Kong stock exchange and contained various currencies prior to this consolidation. Moreover, the reported figures have not yet been audited.

Lower demand and tonnage in 2019

The concern’s European activities sold 4.09 million tonnes of scrap in 2019, down by almost 7 per cent versus the previous year, according to Chiho Environmental. Demand was “strongly affected” by the weakening of the automotive and machine engineering industries in Europe due to softer Chinese demand as a result of the US-China trade war. In addition, Europe experienced lower demand in the export business following the introduction of restrictions on imports of certain types of scrap metal in China.

The Scholz group continues to be the “key profit driver”, and due mainly to its lower operating costs as well as declining net finance costs and taxes, it once again made a positive contribution to the group’s results. “Scholz improved further during the year 2019 and made a positive contribution to the group’s earnings,” commented recently appointed CEO Rafael Suchan.

However, the positive earnings contribution from the European activities could not compensate for the downturn in business which Chiho Environmental experienced in its home market of China. Revenues in Asia, which last year still mainly comprised businesses in China, dropped by nearly half to around HKD2.0bn. The tonnage sold declined by around one-quarter to 230,000 tonnes and scrap prices were also lower, the company said. As a result, the Asian activities posted a loss of more than HKD170m in 2019.

Full coverage of Chiho Environmental's earnings announcement can be found in the print and e-paper edition of EUWID Recycling & Waste Management 8/2020 out on 16 April.

Tags of this news:

previous − Indian recyclers still face fees for imports stuck in ports due to Covid-19 lockdown

BIR calls on governments to recognise recycling industries as essential activities  − next