Battery-metals maker Umicore cuts guidance on EV market slump
By Louis Goss
Umicore said it expects sales of its battery metals could be 'equal or lower' than last year due to a 'sharp slowdown in the growth of demand for EVs'
Umicore, one of the world's top producers of the metals used in batteries, on Wednesday said it expects that a slowdown in the market for electric vehicles will drive a slump in demand for its battery metals that will hit its profits in 2024.
The Belgian company cut its full-year guidance and said it now expects its battery-materials business will fail to generate a profit in 2024 "against the backdrop of a sharp slowdown in the growth of demand for EVs impacting the entire supply chain."
"Customers' demand projections for Umicore's battery materials have steeply declined in recent weeks," Umicore said in a statement. "Consequently 2024 volumes for its battery materials could be equal or slightly lower than last year."
Shares in Umicore (BE:UMI), which is listed on the Euronext Brussels stock exchange, fell 8% on Wednesday and have lost 39% of their value over the previous 12 months.
Umicore had previously issued guidance stating its battery-materials unit would generate adjusted earnings before interest, tax, depreciation and amortization of EUR135 million, in what would mark a 9.4% drop compared with the EUR149 million it made in 2023.
The Brussels-headquartered company said it now expects its battery-metals business will break even in full-year 2024, even including a positive one-off impact of around EUR50 million.
The metals producer blamed a combination of factors, including European companies scaling back their electrification plans and a lack of expected orders from a Chinese manufacturing customer.
Umicore also cut its groupwide guidance for 2024, stating it now expects adjusted Ebitda of between EUR760 million and EUR800 million, compared with the EUR900 million to EUR950 million the firm previously expected.
"Our short-term outlook in Battery Materials is clearly disappointing," Umicore CEO Bart Sap said in a statement. "The electro-mobility trajectory is and will not be linear, like in any other significant industry transformation. ... We maintain a strong belief in the long-term prospects of electrification."
Three of Europe's top EV makers - Stellantis (STLA), Volkswagen (XE:VOW) and Mercedes-Benz Group (XE:MBG) - all reported slowdowns in their sales in the first quarter of 2024.
Umicore, which was formed through the merger of four separate mining and smelting companies in 1989, produces a wide array of metals and minerals including those used in cathodes, which are the most expensive parts of in modern batteries.
The Belgian company traces its origins back to mining company Union Minière du Haut-Katanga, which formerly controlled and operated mines in what is now the Democratic Republic of Congo while it was still under Belgian rule.
-Louis Goss
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
06-12-24 0950ET
Copyright (c) 2024 Dow Jones & Company, Inc.-
What’s Happening in the Markets This Week
-
Worst-Performing Stock ETFs of the Quarter
-
Q3 in Review and Q4 2024 Market Outlook
-
Top-Performing Stock ETFs of the Quarter
-
September Jobs Report Forecasts Show Moderate Hiring Gains
-
Port Strike a Headache for Shippers but a Potential Tailwind for Certain US Transport Stocks
-
13 Charts on Q3′s Roller-Coaster Rally for Stocks and Bonds
-
5 Stocks to Buy Instead of Overpriced US Equities
-
Consumer Defensives: Despite Angst, Thirsty Investors Have Names to Pursue
-
Industrials: Many Stocks Overvalued After Q3 Outperformance
-
Basic Materials: Despite Index Rise, We See Multiple Long-Term Opportunities
-
What the Election Could Mean for Big Tech Stocks
-
3 Lessons From Recent Stock Market Drama
-
Consumer Cyclicals: Even Amid Moderating Consumer Spending, We See Discounts
-
Healthcare: Valuations Look Fair Overall, With Select Industries Still Undervalued
-
Utilities: Falling Interest Rates, Growth Outlook Boosting Stocks