Befesa Q2 Earnings Call Highlights

First-half performance improved: Adjusted EBITDA rose 11% to €124 million, supported by higher steel-dust recycling volumes and zinc prices. The EBITDA margin expanded to 22%, while net leverage declined to approximately 2.18 times.

Guidance reaffirmed: Befesa maintained its 2026 adjusted EBITDA target of €250 million to €270 million and expects to finish near the midpoint to upper end if market conditions persist. U.S. steel-dust volumes, elevated zinc prices and improving secondary-aluminum margins are expected to support the second half.

Expansion and balance sheet remain priorities: The Bernburg expansion is scheduled to start production at the end of August, adding 60,000 tons of capacity and potentially €6 million to €7 million of annual EBITDA. Stronger cash generation reduced net debt to €555 million, while zinc hedging was extended through January 2029.

Befesa ETR: BFSA reported first-half 2026 adjusted EBITDA of €124 million, up 11% from a year earlier, as higher steel-dust recycling volumes and favorable zinc prices helped offset continued pressure in its secondary aluminum recycling business. The company said its second-quarter EBITDA margin rose to 22% from 19% in the prior-year quarter. Net income and earnings per share each increased 13% year over year, while net leverage declined to approximately 2.18 times at the end of June from 2.7 times a year earlier.

Chief Executive Officer Asier Zarraonandia said the company remains on track for another year of earnings growth and reaffirmed its full-year adjusted EBITDA guidance of €250 million to €270 million. The range implies growth of 3% to 11% versus 2025.

Steel Dust Performance Supported by Zinc and U.S. Volumes Befesa’s steel dust segment generated €104 million in adjusted EBITDA during the first half, an 8% increase from the previous year. Segment margin expanded by 260 basis points to 27%. Chief Financial Officer Rafael Pérez said the improvement reflected higher London Metal Exchange zinc prices, increased throughput and lower coke prices, partly offset by foreign-exchange effects and inflation. The average LME zinc price was $3,353 per metric ton in the first half, up 22% from the same period in 2025. The group’s global steel-dust load factor rose by nearly 4% year over year. In Europe, steel production remained near a five-year low, but Befesa’s load factor increased 6% to 91% on strong dust deliveries, particularly in the second quarter. U.S. operations were a key contributor to volume growth. While U.S. steel production fell 6%, Befesa said lower steel output generated higher dust deliveries. U.S. utilization averaged 75% in the second quarter, up 11% from a year earlier, aided by new contracts with steel producers. Zarraonandia said U.S. volumes increased 33% in the second quarter and that the growth was largely attributable to new contracts rather than a broad improvement in steel production. The company expects third- and fourth-quarter U.S. volumes to remain near second-quarter levels. Turkey’s volumes were weak and South Korean operations were broadly stable, while utilization in China remained subdued. Befesa said it expects Turkey and South Korea to improve in the second half, while Chinese operations continued to operate around breakeven.

Aluminum Markets Remain Uneven Befesa said its aluminum salt slag recycling business increased revenue 10% year over year to €61 million in the first half, with EBITDA also rising 10%. Volumes declined 4%, but higher prices offset the volume effect. Management said salt-slag volumes normalized during the second quarter and are expected to remain at normalized production levels through the rest of the year. Higher collection fees are also expected to provide support.