European Metal Recycling's dockside processing plant in Seaforth.
Scrap metal giant European Metal Recycling (EMR) suffered a fall in turnover for the year to December 31, but the Warrington-based group managed to bolster pre-tax profit levels.
The business, which operates processing operations in the UK, US and Europe, including Liverpool docks, achieved sales of £2.52bn during the year, compared with £2.81bn a year before, due to lacklustre demand throughout the sector and price pressures.
However, it did manage to grow pre-tax profits from £47m in 2013 to £57m last year, although this still compares badly with the group’s pre-tax profits of £116m in 2012.
Its latest accounts filed at Companies House revealed the impact a fall in global demand has inflicted on the business.
It said steel markets were “characterised by ongoing, relatively lacklustre demand”, adding “structural overcapacity continues to exist in the global steel industry in the face of a relatively weak global economy”.
It said weakness in the Turkish economy, which is the world’s largest importer of recycled steel and an important market for EMR, and the relative strength of the US economy, led to a 20% depreciation in the Turkish Lira against the US Dollar.
It added the resulting reduced competitiveness of Turkish v Chinese steel led to reduced demand for raw materials.
Another effect on EMR’s figures was the continuing international sanctions against Russia, which had a dramatic impact on the Rouble, plunging by more than 30% against the Dollar.
The report said this resulted in increased competitiveness from exported Russian steel, and significant substitution of scrap metal with cheap Russian secondary products.
However, the group still undertook major investments, including its US ship recycling facility to enable the recycling of US Navy aircraft carriers.
The group has been awarded contracts for the towing, dismantling and recycling of two conventionally-powered carriers, the USS Constellation and USS Ranger.
The first docked at EMR’s Brownsville site in late 2014, and the second was due this year.
EMR’s results, which were signed off by group chief executive Christopher Sheppard, paid tribute to the commitment and diligence of its “exceptional and dedicated” workforce.
Source: Liverpool Echo. 9 October 2015