Umicore's gold sale boosts profit, but core business remains soft

By Dimitri Rhodes and Cian Muenster

Feb 20 (Reuters) - Belgian metal recycling group Umicore beat 2025 profit expectations on Friday, but its shares fell 5% as most of the gains came from a sale of gold inventories while the underlying business remained muted.

Umicore's adjusted earnings before interest, taxes, depreciation and amortisation, including contributions from associate companies where it holds minority stakes, rose 11% to 847 million euros ($996 million), beating analysts' forecast of 838 million euros in a Vara consensus poll.

The previously announced sale of gold inventories contributed 486 million euros to the core profit, more than half of the total, as Umicore seeks to replace its permanently tied-up inventories with more profitable revolving metal leases.

Gold prices soared about 60% higher in 2025, driven by geopolitical and economic uncertainty.

DOUBLE-EDGED SWORD OF SLOW EV ADOPTION

Umicore, which supplies battery materials such as nickel, manganese and cobalt to automakers and other companies that make batteries for electric vehicles, is bound to benefit from the rising adoption of EVs in Europe.

However, weaker than expected EV demand is holding back this potential, and last year led the company to slash its capital spending plans, including an 800 million euro reduction in the battery cathode materials unit.

Meanwhile, the EV shift is translating to a less supportive environment for Umicore's business making catalytic converters for combustion engine cars, responsible for about half of the group's revenue, it said.

The European Union said in December it planned to drop a 2035 ban on new combustion engine cars, bowing to pressure from carmakers, even as sales of fully electric cars surpassed those of petrol-only vehicles in the bloc for the first time.

($1 = 0.8505 euros)

(Reporting by Dimitri Rhodes and Cian Muenster in Gdansk, editing by Milla Nissi-Prussak)