* 2013 recurring operating profit (REBIT) down 18 pct
* REBIT of 304 mln euros vs consensus of 307 mln euros
* 2014 REBIT may be lower if precious metals prices persist
* Upbeat on auto catalysts, battery materials
* Shares up 6 pct
(Adds shares, analyst view)
BRUSSELS, Feb 6 Belgian speciality materials
maker Umicore is optimistic about growth at its
automotive catalysts and high-tech battery materials businesses
even though weak precious metal prices could depress profits
further this year.
Umicore reported an 18 percent fall in profits for last year
on Thursday partly due to the impact of lower metal prices on
margins in its recycling business.
The company said it expected a definite improvement in the
performance of its product businesses, which include automotive
catalysts and battery materials for products such as mobile
"Revenues and margins are set to increase further due to
continued growth in sales of rechargeable battery materials and
a recovery in some of the other end markets," the group said in
A rise in global auto production and higher demand for
Umicore's rechargeable battery material in mobile devices,
tablets and power tools should ensure growth for the group's
catalysts and energy materials divisions.
But Umicore also said this might not be enough to offset the
impact of lower metal prices on the profitability of recycling.
"If current metal prices persist, full-year recurring EBIT
(profit) could end up slightly below the level of 2013", it
Umicore shares rose as much as 6.0 percent to 33.48 euros,
albeit only returning to their level of a month ago.
UBS analyst Joe Dewhurst said the market had been
increasingly used to disappointing earnings and forecast
downgrades from Umicore, such as its profit warning in October.
"The precious metal price risks are very firmly understood
by the market ... But what you are seeing is growth in all the
high-technology businesses and that's a step up," said Dewhurst,
who has a "Buy" rating on the stock and a 37 euros price target.
"The real thing is this is an upbeat outlook message from a
company that in the past has been very positive about the
long-term technology potential but extremely conservative short
Umicore reported an 18 percent fall in REBIT to 304 million
euros ($411.4 million). That compared with the 307 million euro
average in a Reuters poll and Umicore's own forecast of the
lower end of a 300-330 million euro range.
Operating profit for recycling fell 23 percent. Sales for
silver-based applications were lower due to poor demand from the
solar industry and jewellery industry demand dipped. But the
chief cause of the decline was lower metals prices.
For certain precious metals, Umicore had locked in prices at
previous periods. For others, such as selenium and iridium, such
hedging is not possible.
Recycling made up 28 percent of revenue and 61 percent of
group operating profit in 2012. That dropped to 25 and 57
percent in 2013.
Still, Umicore plans to invest 100 million euros at its
Hoboken site in Belgium to expand its precious metals refining
capacity there by 40 percent to 500,000 tonnes per year.
($1 = 0.7390 euros)
(Reporting By Philip Blenkinsop; editing by Robert-Jan Bartunek
and Jane Merriman)