Metals recycling group Umicore (UMI.BR) on Friday reported a 24% fall in half-year core profit and booked a 1.6 billion euro impairment for its battery materials division in the face of weak demand for electric vehicles.
The company, which makes catalytic converters and battery materials for carmakers, has decided to postpone a "large scale" investment in an unspecified battery recycling plant in Europe due to EV market weakness.
It will also delay a battery materials plant investment in Canada, as it launches a strategic review of its business.
"The market context is challenging and we have seen a slowdown in the growth of EV sales in the short and mid term," CEO Bart Sap told analysts.
It now expects production at the European battery recycling plant to start in 2032 at the earliest.
Umicore's shares were down 2.6% at 0943 GMT.
"The low visibility on underlying market trends and technology choices has dented investor confidence, but the current valuation seems attractive" said KBC analysts in a note.
Umicore's adjusted core profit (EBITDA) fell 24% to 393 million euros ($426.68 million), missing the 398.5 million expected by analysts in a company-provided consensus.
Profits at the battery materials division fell 99% to 1 million euros. The group said the 1.6 billion impairment would reflect lower values of some of its plants and equipment.
Umicore last month lowered its 2024 profit forecast, citing weak demand projections for battery materials due to the EV slowdown.
The company on Friday confirmed its full-year guidance for core profit at group level, but forecast that the battery materials division would have an operating profit below break-even in 2025 and 2026.
The company specialises in nickel, manganese and cobalt battery materials, and faces additional pressures as some car-makers switch to cheaper lithium-ion phosphate components.
CEO Bart Sap told analysts that the two types of batteries can coexist on the market.
In June, Umicore announced job cuts at its German business producing automotive catalysts, which helps reduce emissions in gasoline and diesel engines.
($1=0.9211 euros)
