Befesa SA ((DE:BFSA)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Befesa SA’s recent earnings call painted a picture of strong financial performance, tempered by challenges in specific sectors and regions. The company reported significant achievements, particularly in the U.S. market, but acknowledged ongoing difficulties in the secondary aluminum business and in China. Despite these hurdles, Befesa remains optimistic about its future, driven by successful project completions and strategic expansions.
Strong Financial Performance
Befesa SA reported a robust financial performance for the first nine months of 2025, with adjusted EBITDA reaching EUR 174 million, marking a 15% increase year-on-year. The company’s EBITDA margin improved significantly to 21.3% in Q3 2025, up from 16.6% the previous year. Additionally, earnings per share (EPS) saw a remarkable rise of 143% year-on-year, reaching EUR 1.52.
Successful Projects and Expansion
The company celebrated the successful completion of its Palmerton expansion project in the U.S., with both kilns now fully operational. Furthermore, the Bernburg expansion project is well underway, with construction having commenced in August 2025. These expansions are pivotal for Befesa’s growth strategy, particularly in capturing market opportunities in the U.S.
Strong U.S. Market Performance
Befesa’s operations in the U.S. have shown impressive results, with steel production increasing by 4% year-on-year in Q3. The U.S. plants are operating at an 80% load factor, and the fully operational Palmerton plant is poised to capitalize on growth in the U.S. EAF steel dust market.
Challenges in Secondary Aluminium Business
The secondary aluminum industry in Europe continues to face significant challenges, with tight metal margins and limited production activity due to a weak automotive sector. This has resulted in a 26% year-on-year decrease in EBITDA for Befesa’s Aluminum Salt Slag segment.
Weak European Steel Production
European steel production has been sluggish, with a 4% decline year-on-year in Q3 2025. This downturn is attributed to weak manufacturing activity and soft demand in the automotive and construction sectors, presenting a challenging environment for Befesa.
Continued Challenges in China
Befesa’s operations in China continue to struggle, with low utilization levels and earnings hovering around breakeven. These challenges reflect ongoing market weakness in the region, which remains a concern for the company.
Forward-Looking Guidance
Looking ahead, Befesa has provided guidance for the remainder of the year, confirming its full-year EBITDA target in the lower range of EUR 240 million to EUR 265 million. The company expects financial leverage to fall below 2.5x by year-end, with CapEx projected between EUR 80 million to EUR 90 million, focusing on the Bernburg project. Befesa also plans to maintain its dividend policy, distributing 40% to 50% of net income to shareholders.
In summary, Befesa SA’s earnings call highlighted a strong financial performance, driven by successful project completions and strategic expansions, particularly in the U.S. market. However, challenges persist in the secondary aluminum business and in China, with weak European steel production adding to the headwinds. Despite these challenges, Befesa remains optimistic about its future prospects, supported by its forward-looking guidance and strategic initiatives.