Campine follow-up

This is a follow-up post after my introductory post about Campine. I will touch upon Campine’s 2024 results, the company’s expectations for 2025 and some recent developments linked to the specialty chemicals division.

Campine’s 2024 results

Campine reported its 2024 results last month. In line with the estimations incorporated in my write-up, EBITDA came in above 40 million and earnings came in above EUR 20 million.

Under the hood it was nice to see how they were able to increase the EBITDA in the circular metals division by 22% (from EUR 22,3 million to EUR 27,1 million) despite revenues dropping by 11% (from EUR 236,4 million to EUR 211,2 million).

Campine explained the decrease in revenues by a 4-month production interruption due to a fire in one of its French factories. The increase in profitability was explained by the high sales premiums for specialty alloys and improved purchasing conditions. The improved purchasing conditions are the result of the weak automotive market in Europe, transpiring to the battery scrap market, allowing Campine to purchase its battery-scraps at lower prices.

As expected, the record results in 2024 were mainly influenced by the specialty chemicals division, in which EBITDA more than tripled from EUR 4,5 million in 2023 to EUR 14,6 million in 2024. The surge in profitability was mostly the consequence of a price effect (with average prices of antimony increasing from $12 050 / ton in 2023 to $23 150 / ton in 2024) because volumes only grew 6% YoY.

Campine’s expectations for 2025

In the circular metals division, Campine expects an improved contribution from the French factories now that they are fully operational again after the 4-month production interruption in 2024. At the same time, battery scrap is still abundant and as a consequence of the high antimony and gold prices the recycling margins are still good in the first months of 2025.

In the specialty chemicals division, Campine indicates that demand for antimony products remains extremely high in the first quarter of 2025, especially from overseas. It is however difficult to find additional antimony raw materials to satisfy the demand. The struggling European automotive market limits the demand for the recycled plastics business. Campine however expects that the European circular economy regulations should have a positive effect since it will oblige the industry to use more recycled plastics.

Overall, according to the company: "Unless market circumstances change drastically in the coming months, Campine expects another ‘solid’ year in 2025 in line or even surpassing the 2024 record."

Recent developments related to the specialty chemicals division

In my write-up I referred to the fact that Campine was a top-three antimony trioxide producer. Campine’s CEO mentioned in an interview last month that Campine recently became the worldwide leader in the production of antimony trioxide following the Chinese decision to block exports to Western countries. Campine is now contacted worldwide, including by the American government, for collaborations.

In February, this article called antimony the $100k metal. The author sees two key factors supporting the durability of the expected price move. Firstly, the only significant new non-Chinese antimony supply expected to come online in the next four years is from Larvotto Resources based in Australia. Secondly, China's strategic decision to preserve its antimony reserves for domestic use, both for critical future industries and national security purposes, signals a long-term constraint on global supply. The author his expectation has played out so far since the price of antimony has further increased from about $40k / ton at the time of my article to close to $60k / ton.

Hans Vercammen, Campine’s division director of the Specialty Chemicals division shared his take on LinkedIn after speaking at the annual antimony forum in China last month. He mentions that supply is expected to rebalance in the next 1-2 years due to a combination of factors: new mining projects coming online, increased metal production in Southeast Asia, more antimony trioxide production outside China (Campine’s capacity is 20 000 ton / year), expanding recycling efforts (Campine is building its 4^th recycling reactor based on its own technology) and potential geopolitical shifts in Critical Raw Materials. While the short-term price surge was dramatic, it could push industries to substitute antimony with alternative compounds, particularly in the flame retardant sector.

This LinkedIn post from an investment banker active in the sector provides an interesting read as well. Taking into account the rarity / scarcity of the metal, he believes that the equilibrium price of antimony should be around $70k / ton. While antimony is for instance 300 times more scarce than copper and 10 times more scarce than tin, it has historically traded at just 1 to 2 times the price of copper and at a third of the price of tin. According to his analysis the price increase of antimony is more a matter of a correction compared to prices that were historically unsustainably low.

It seems that antimony prices are not expected to drop anytime soon this year or even next year. This expectation is reflected in the valuation of the companies active in the sector. UAMY for instance, the company I referred to in my introductory article, is currently trading for a $367 million valuation. Its valuation increased by 85% since the start of the year. This analyst report estimates that the company will bring in $42 million in revenues in 2025 and have earnings of about $1,7 million. For 2026, the analyst expects the company to generate $11 million in profits on $87 million in revenues.

Summing it all up

I’m happy to continue holding my shares in Campine. The company recently became the worldwide leader in the production of antimony trioxide, is further scaling its antimony recycling business (with the expectation to recycle over 5000 tons of antimony per year in 2027) and is still trading at only 11 times 2024 earnings.

The 2025 results will not only benefit from the continued increase in antimony prices, but from the restart of the French factories in the circular metals division as well.

I’m looking forward to the release of the company’s 2024 annual report next Friday and to attending the AGM at the end of next month in Antwerp. Please let me know in case you would like to share some questions with the management and I will try to ask them at the AGM.