Umicore Half-Year 2014 Results

Aug. 1.14 | About: Umicore SA (UMICF)

Summary

Revenues of € 1.2 billion (down 1%).

Recurring EPS of € 0.87 (down 15%).

Recurring EBIT of € 138 million (down 15%).

ROCE of 12.5% (versus 14.5% in the first half of 2013).

Recurring net profit (Group share) of € 95 million (down 17%).

This will be a very short article commenting about Umicore's (OTCPK:UMICF) first half year results of 2014. A full analysis can be found here.

The company rose more than 2% today, on a very bloody trading session with losses of most stocks exceeding -2%, as management is raising its profit target for 2014.

The company now sees recurring EBIT to come in between 265 and 280 million. Which is still 8 to 13 percent lower than last year, but still better than what they were previously expecting.

It has been the second time this year that management adjusted its profit forecast for the year. In April, the company send out a severe profit warning, but now it appears that that profit warning was a little too pessimistic. The recurring EBIT will come out at the higher end of the earlier proposed price fork of €250 - €280 million.

The company is referring to the growing demand of rechargeable batteries and the special materials that are used to produce them. Lithium-ion batteries are still omnipresent in wearable electronics like smartphones and its popularity in cars is also growing. So the battery division was the big surprise of Umicore's half-year report.

The works at the Hoboken facility, which is ready to be expanded by 40% by 2015, have also not interrupted the recycling activities as much as was previously thought.

The company is also expecting a big improvement of its catalysts division as the tide for the automobile industry in Europe is turning and becomes positive again, with new contracts and extra demand for the production of catalysts for heavier vehicles like diesel trucks.

Conclusion

This is great news for investors as it shows that the previous bad quarter was not caused by severe structural problems. My opinion about the stock does not change and I'll continue to be bullish about the stock.

Disclosure: The author has no positions in any stocks mentioned, but may initiate a long position in UMICF over the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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