In the first quarter of 2019, a significant increase was recorded in the volume of raw material purchases of battery scrap, and an increase in the volume of lead sold, as compared to the same period last year. Despite the increase, the Group achieved lower results as compared to the first quarter of 2018, mainly due to a cyclical decline in lead prices at the London Stock Exchange (LME) by 10% as denominated in PLN, which resulted in the lower figure of gross margin on sales. In addition, the results were affected by the increase in the cost of electricity and gas, and in the increase in waste management costs, which together contributed to higher costs by PLN 1.2 million as compared to the first quarter of 2018. Growing operating costs may have an impact on our competitiveness on the European market in the long term.
„Stable development, efficiency and effectiveness of our plant as well as a long-standing cooperation with strategic contractors enables us to achieve positive results, despite the fact that macroeconomic factors on which we have no influence generate higher costs of our operations. The important thing is that we have seen a positive stable trend in volume growths on the raw material purchasing side as well as on the selling side for our products from the beginning of the year” – says Michael Rohde Pedersen, President of the Management Board of Orzeł Biały.
In the reporting period, we received a notification regarding the conclusion of a conditional share purchase agreement for shares in NEF Battery Holdings S.a.r.l. In the event of effective delivery of the agreement, ZAP Sznajder Batterien S.A will indirectly acquire the majority stake in the Company.
„Currently, proceedings are pending before the Office of Competition and Consumer Protection, and we are awaiting a settlement that will affect our further decisions regarding the process of strategic options review as conducted by the Company.” - said Michael Rohde Pedersen, President of the Management Board of Orzeł Biały.
Orzeł Biały refined lead sales volumes (kT)
Consolidated financial performance of Orzeł Biały Group