Aurubis Slashes Earnings Outlook After Metal Scam Cost €185M

SEATTLE (Scrap Monster): Top European copper producer Aurubis (OTCPK:AIAGF) (OTCPK:AIAGY) cut its full-year earnings forecast Tuesday after a scam involving shipments of scrap metal cost €185M.

The German steelmaker said last month it discovered a significant metal shortfall, and it believed some of its suppliers had manipulated details about the scrap metal they provided.

Aurubis (OTCPK:AIAGF) (OTCPK:AIAGY) now expects annual EBIT of €310M-€350M ($331M-$374M), down from the previously anticipated €450M-€550M, and sees operating return on capital employed of 8%-12%, down from its prior outlook of 14%-18%.

Aurubis (OTCPK:AIAGF) (OTCPK:AIAGY) said it expects insurance payments will cover ~€30M, and it will recoup some losses from seized assets.

"The implementation of our growth strategy remains unaffected by current developments because Aurubis is in a financially robust position with sufficient liquidity," CEO Roland Harings said.

Courtesy: www.seekingalpha.com