Waste Recycling: Befesa Navigates Challenging Waters

BefesaImage Source: Befesa


Befesa, a key player in hazardous waste recycling, reported mixed financial results for the first 9 months of 2023. While revenues saw an 8% increase, adjusted EBITDA dropped by 17%, mainly due to unfavorable market conditions like low zinc prices and high coke prices. Despite challenges, the outlook for 2024 remains positive.


Befesa S.A., a Luxembourg-based company specializing in hazardous waste recycling for the steel and aluminum sectors, has released its financial performance for the first nine months of 2023. The company reported total revenues of $904 million, marking an 8% increase primarily driven by its zinc refining operations in the United States.

However, the adjusted EBITDA, a key indicator of a company's operating performance, decreased by 17% to $137 million. This drop was mainly attributed to lower zinc LME (London Metal Exchange) prices, increased zinc treatment charges, and higher coke prices, although it was partially offset by better zinc hedges and lower energy costs.

Regarding production volumes, Befesa had a mixed performance. While the throughput of electric arc furnace (EAF) steel dust remained almost flat at 890,000 metric tons, zinc refining plants in the US were operating at high utilization levels. In China, the real estate crisis has impacted the volumes, causing plants to run at lower-than-expected utilization levels.

Energy prices also had a mixed impact on Befesa's operations. While coke prices reached all-time highs in the first half of the year, they started to reduce in Q3. This had a negative impact on steel dust operations, whereas gas and electricity prices remained stable, positively impacting the Aluminum Salt Slags operations.

In terms of liquidity, Befesa maintained a strong position with more than $150 million in cash reserves. However, it should be noted that the net leverage ratio increased to x3.38, up from x2.56 at the end of 2022.

Javier Molina, the Executive Chair of Befesa, remarked that despite 2023 being a challenging year, the company is optimistic about 2024. Many of the challenges, like high zinc treatment charges and low zinc prices, are expected to subside. Furthermore, growth in the US and a positive contribution from China are expected to provide tailwinds for the company.


Befesa's financial results for the first nine months of 2023 have been a mixed bag, with an increase in revenue but a decline in adjusted EBITDA. Despite the challenging market conditions, the company's strong cash reserves and optimistic outlook for 2024 suggest that Befesa is well-positioned to navigate through the existing challenges.

SteelGuru Business News