Ladies and gentlemen, welcome. Thank you for joining the live webcast of ElvalHalcor for the first half of 2025 financial results. Mr. Angelos Giazitzoglou, Deputy Chief Financial Officer of the ElvalHalcor Group, and I, Dimitrios Theodorakatos, Consolidation and IR Manager of the group, are going to provide you insights into our performance. After the end of the presentation, we will conduct a Q&A session where you are welcome to ask any questions regarding our group and its financial performance. Now, let me walk you through presentation and the highlights of the period. In the first half of 2025, we achieved solid performance despite the challenging and volatile economic environment. We delivered increased profitability, supported by higher commercial prices and sales volume. Our operational profitability, as measured by Adjusted EBITDA, shows EUR 134 million, marking an 80% year-on-year increase.
The sales volume of the group increased by 2.1% compared to the corresponding prior year period, reaching 303,000 tons. The aluminum packaging segment continued to drive growth, supported by rising demand for flexible packaging products. Robust operational profitability and positive free cash flows allowed us to reduce our net debt significantly, down by EUR 111 million from June 30, 2024, despite the challenges in the supply chain, which increased uncertainty about the trade ties and increased operating prices. The reduction in net debt and interest rates resulted in reduced financial costs. This, combined with a strong profitability, benefited the end-of-year taxes, which stood at EUR 74 million. Net debt to adjusted EBITDA ratio improved to 2.4 from 3.3 last year. I will now turn the floor over to Mr.
Giazitzoglou, who will share his comments to provide further insights to our performance. Angelos?
Thank you, Dimitrios. Before we delve into more details about the semester's results, let's review some aspects of the macroeconomic environment. The overall view was mixed regarding the prices of metals, energy, inflation, and interest rates. Metals moved slightly higher compared to 2024, resulting in some pressure on our working capital. However, in the second quarter, we saw a de-escalation amid concerns over potential trade tariffs. The same trend was observed in energy prices, which rose, driving energy costs to higher levels. On the other hand, inflation showed signs of a slight decline in the second quarter. As a result, interest rates continued to decrease steadily throughout 2025. On our next slide, we have our cost breakdown excluding, of course, metal costs.
Although there was a slight decline in natural gas prices during the second quarter of 2025, they still remained at higher levels than those of 2024. Electricity price also rose, resulting in an increase in production costs. Inevitably, energy's share of total production cost has increased from 13% - 16%. The other categories remained stable, with the personnel expenses accounting for the largest proportion overall. Next slide presents our volumes per quarter. As presented on the slide that summarized the key highlights, the group achieved a 2.1% increase in volumes. The aluminum segment, for a second consecutive quarter, achieved an increase compared to the corresponding quarter of 2024. The packaging market continues to be the most resilient and the one with the greatest growth potential. The increase compared to 2024 reached 9%.
In the rigid packaging, beverages lead the way, followed by food containers. Flexible packaging saw the slight decline in the second quarter of 2025 compared to the first one, however, stays above 2024 by almost 9%. The transportation sector also contributed to that performance with an increase of 8% compared to 2024. Sales in the copper segment increased slightly during the second quarter of the year, reaching levels similar to those recorded in 2024. Energy and power networks recorded a significant increase by 8.3%, while industrial application fell by 4%. This balanced performance sets the stage for a closer look at profitability on operational basis. The organic profitability in second quarter demonstrated an improvement over the first quarter across both segments. The aluminum segment yielded the higher result of EUR 42 million, with the copper segment following up EUR 28 million.
Higher sales and better prices led aluminum to this strong performance. Material price, cost pressure, and sluggish market conditions during this quarter have not supported the enhanced performance within the copper segment. Moving to the Adjusted EBITDA per ton. The correlation between the quantitative data and profitability is reflected in the following figures for Adjusted EBITDA per ton. The aluminum segment performed better during the second quarter, and profitability per ton even marginally increased for the first semester to EUR 383 from EUR 378 at the first quarter. A 42% increase compared to EUR 24 represents a significant achievement, especially considering the challenging and unfavorable conditions. In the copper segment, the increase compared to the first quarter was even greater, with numbers rising for the first semester to EUR 584 from EUR 554.
Supply chain disruptions resulting from the anticipated tariffs on copper products impacted the availability of raw materials and scrap. The effect of that, combined with an unfavorable sales mix, kept profitability below 2024 levels by 9%. The next slide highlights group strength and diversified market portfolio. Starting from the left in the aluminum segment, it is evident that packaging represents the primary market, accounting for 65%, an increase of 9% from 2024. Seventy-eight percent of that is rigid, beverages and food cans, and twenty-two percent is flexible. Transportation accounts for 12% of the total, with an increase of 8% from 2024. Building and construction saw 12% again, of total, noticing a decline of 17% from 2024. In the copper segment to the right, the distribution is more balanced.
The energy and power networks recorded an increase of 8.3%, while the building and construction sector experienced a 2.4% rise. On the other hand, sales volume for products used in industrial applications declined by 4.4%. Following the markets, the focus shifts to geographical distributions. The geographical distribution of sales in both segments remains essentially unchanged. Europe represents approximately 80% of total sales and continues to be the main market for the group. The diversification of our sales portfolio enhances the group's resilience to adapt to potential pressure of changes. Strong international orientation of sales with no dependency on a single country or geographical area provides the ability to capitalize on any future opportunity. Now, let's translate all this into numbers.
During the first semester, sales increased by 2.1% in 303,000 tons, despite the market conditions described. The organic profitability amounted to EUR 134 million, up by 18.1% compared to 2024. The drivers of this were the increase in volumes, higher conversion prices despite market pressures, and favorable mix, mostly in aluminum segment. Revenue, supported by volumes and metal prices, stood higher than the corresponding semester of 2024, just below EUR 2 billion. LME metal prices recorded a notable increase during the first quarter of the fiscal year, followed by de-escalation in late March. The increased metal prices created an accounting result of EUR 7 million, which boosted the EBITDA to EUR 139 million, up by 20.8% compared to the first half of 2024. Moving to some more financial figures.
The positive results are also evident in additional performance metrics for the first half of the year. The adjusted EBITDA, the adjusted EBIT increased by 24.1% compared to the corresponding semester of 2024, amounting to EUR 100 million. EBIT increased to EUR 105 million, at 27.8% growth compared to 2024. Following the successful reduction of financial costs to EUR 80 million, EBITDA reached the amount of EUR 89 million, 48% increase compared to the same period of the previous year. Moving to the next slide, let's see how we bridge the two quarters in terms of EBITDA result. This EBITDA chart clearly reflects what boosted our profitability in the first half of 2025. Plus EUR 10 million from increased volumes, plus EUR 14 million from prices and sales mix.
The increase in energy costs and inflationary pressures on other cost drivers slightly restrained profitability. A EUR 4 million increase in SG&A, mainly driven by inflation. Lower interest costs by EUR 5 million. Plus EUR 4 million from other accounting entries, and the EBITDA reached the amount of EUR 89 million. Next slide for the cash flow. Cash flows for the first semester were significantly affected by pressures on working capital. However, the very strong profitability of EUR 139 million in EBITDA generated sufficient headroom, not only to address this challenge, but also to further reduce the group's debt. The reduction of financial costs to EUR 80 million due to lower interest rates and reduced debt, along with the investment expenses at EUR 37 million, contributed to EUR 15 million free cash flow. By repaying loans totaling EUR 53 million, the group closed the semester with cash of EUR 42 million.
Now let's see our working capital and net debt evolution. During the presentation of the 2024 annual results, it was stated that achieving a similar reduction in working capital may not be feasible in the future. The announcement of tariffs on aluminum and copper presented challenges both in commercial operations and in the procurement of raw materials. The disruptions in material sourcing and the increase in scrap prices is due to the outflow of quantities to the U.S. market. As a result, we experienced a shortage of scrap quantities in the European market. In this context, the group prioritized the continuous operation of its production units over reducing working capital. Inevitably, working capital increased compared to 2024 to EUR 605 million. However, it remains slightly lower than the first quarter of 2025.
Despite the challenges related to working capital, the group successfully reversed its first quarter position and further reduced its net debt to EUR 630 million. This positive result was driven by the strong profitability and the low investments. Last but not least, let's see our CapEx. CapEx as planned will remain at low levels compared to the previous years. I would like to emphasize that our group continuously reviews investment plans, although their execution depends on assessment of global developments. This approach was proved successful in the past. Now, to summarize, before we address any questions, the group's financial results for the first quarter of 2025 reveal a robust performance driven by increased sales volumes, improved profitability, and an effective debt reduction. All these were achieved despite challenging market conditions and rising costs.
The uncertainty in the national trade remains, and geopolitical tensions are still here. We acknowledge that, there is no room for complacency. We must remain vigilant, monitoring the developments, taking all necessary actions to effectively navigate this, demanding period. Thank you for your attention. Now, Dimitrios, we can proceed to the Q&A session.
Thank you too for your attention. As you said, Angelos, we can proceed, and we would like to inform you that you can place your questions with two different ways, either by raising your hand and or by submitting it on to the Q&A tab at the bottom of your screen.
Okay. First question from Vasilis Manesis. Could you please discuss the current condition in the scrap markets and how do they affect your production? Also, can you please update on U.S. sales in Q3? Finally, can you please provide an update on the working capital movements? Okay, the question has three parts. I will start with the first one about the scrap markets. The picture and the environment is similar with what we have described during the presentation. A lot of scrap quantities went to U.S. markets, and that creates a shortage in Europe. At the same time, prices went up, and that affects our production costs in a significant way.
That is why we're trying to improve the supply, the sources of our raw materials. We're trying to find other ways to cover the needs that we have in our production facilities. Till now, we successfully did that, and we believe that we won't have any bigger problems in the future. Of course, we have an increase in our working capital, and we will see how we can deal with that in the next coming months. Now, about the U.S. sales in the third quarter. Again, now, at this point, the environment is totally different from the first semester because as you know, the 25% of tariffs now is 50%.
Eventually our customers are trying to push us to increase our prices. This is something that we don't want to do that. As I mentioned before, the diversification that we have in markets and in products and in geographical areas give us the opportunity and the advantage not to have any dependency from certain markets. We believe that we can and we will try to replace any lost sales in US for in other markets. I think that we can do that. Now, finally, an update on working capital.
As I said before, yes, we have an increase in working capital, but although we managed through profitability and low investments to keep achieving the goal that we have to lower our net debt, and we will continue to do the same in the future. Next question from Evangelos Karanikas. Good afternoon. Can you please tell us the impact of tariffs on aluminum and copper, please? Yes. The impact is that we experience increased prices and shortage in quantities. Increased prices affects our costs and shortage in quantities makes us try to find alternative sources.
I think that the increase in our volumes and the ability that we have keeping the prices in that levels will offset this increased cost in production, and we will keep having this good profitability in the future also. Next question, Thomas Renault. Good afternoon. You continue to reduce your CapEx. Could you share with us our current capacities in thousands of tons for each business and the utilization rate? In the aluminum segment, our current capacity is around 450,000 tons. In terms of free capacity, no more than 10%. In the copper segment, the free capacity is bigger.
Let's say that, depending on the product mix, maybe we have 25% of our total demand as a free capacity. Stelios Morfis, raise another question. Could you give us an idea of how the third quarter is going? Also, could you give us guidance for the full year? Yeah, guidance for the full year. No one can dispute that the second half of the year will be more challenging and more uncertain. Disruptions in international trade, rising raw material prices and ongoing geopolitical tensions are shaping a regime that requires from us to stay vigilant and take any necessary actions to mitigate risk.
The presence in more than 90 countries and no dependence on specific geographic market, as I said before, or products provides a strong foundation of stability for the group. The extensive product portfolio and diversification represents the group's greatest balancing in responding to external challenges. If nothing changes in the near future, this is gonna be the environment that we will operate in, more challenging and more uncertain. I don't see any other question. Let me check the chat. Maybe someone has put the question there. No. Stelios Morfis again. The Q3. I think that what I have said about the full year stands for the Q3 also.
More challenging conditions, more pressure from our customers in U.S. market, and increased production costs for the metal price. Fortunately, and hopefully, we expect to see some decline in energy prices and have some benefit from that during third quarter and the full year. We see some decline right now. If we continue to see this decline in electricity and natural gas prices, this will positively affect our performance for Q3. Another question from Constantinos Zouzoulas. Zouzoulas, please forgive me. Thank you for the presentation. Can you tell us about the evolution, energy cost and operating costs? I think that I have already discussed this in the previous question.
We see a decline in energy costs. During the first quarter, the energy cost was rising, and that affects our profitability compared to 2024. We saw an increase almost by 25% from the corresponding semester of 2024 in energy cost. Yes, this is something that concerns us a lot. I have to say that energy is an important cost driver, of course, and we are very concerned about price volatility. However, our industry is not so energy intensive as others, for instance steel. As far as natural gas is concerned, we try to cover our production cost to a significant extent using hedging instruments. In electricity, is something totally different.
We have already entered into several power purchase agreements for renewable energy sources, solar and wind, and we will continue to evaluate alternative options to effectively manage associated risks. Maria Georgiadou. I will try to translate the question in English. Disruptions, international trade increase, increased prices for raw materials and metals and ongoing geopolitical tensions, challenges in supply chain and high interest rates, inflation continue to put pressure into global economic environment. A big question. Let me first read it in Greek. Looking at future.
I think, Angelos, that it is not actually a question.
Exactly. It's a statement.
Yes.
Maybe we can use it to answer some of the questions that we have. Thank you very much, Maria. Yes. All these that you are mentioning, it's true. We have still geopolitical tensions. We have pressures from prices from energy costs. We see that markets are still moving very slowly. In an environment like this, yes, the group is watching and monitoring all these developments and we will assess any measures to mitigate all the risks that we face. Maria Georgiadou, okay, it was wrong, but you helped us. No worries. The question is, where are the other markets you are looking beyond USA?
As I told you, we sell in more than 19 countries worldwide. Of course, Europe is our core market with 80% of our total sales selling there. We sell all over the world. Wherever we will find the opportunity to sell our quantities, we will do it in order to replace any potential slowdown in order intake from U.S.
I think, Angelos, there is a question in the chat.
In the chat? Okay. Let me see.
Yes.
Chat. Okay. Yes, the first one was from Maria Georgiadou. We have answered this. Risk mitigation measures, you said about energy. What about trading and derivatives markets? What is going on there? Also, how are major markets faring with regards to the tariffs? Any moves to further diversification? Further diversification. In markets, we sell almost everywhere. I don't know if we can find many new markets, but if there is an opportunity out there, we will chase it. Risk mitigation measures about energy. I said earlier that we already have several power purchase agreements for electricity in order to decrease the total cost of electricity. We also use some hedging instruments in terms of natural gas.
I don't know if we can do anything else except that we were also trying to optimize our production in order not also to have lower prices from prices in energy but also to consume less in order to have lower costs in our production. Consume less energy, I mean. How are major markets faring with regards to the tariffs? I don't know if you refer to competitors of ours or you are referring to let's say how the metal markets are dealing with this issue. I think that also our competitors probably facing the same problems with tariffs.
Probably they will try to find, as we will try to do, alternative markets to sell their products. Probably this will increase the quantities that we had in European market. Yes, this is something that we have to deal with. How is your company's major markets performance faring? As I said before, the European market is our core market. The picture there is a little bit mixed. In some sectors, we see resilience and we see growth, like beverages. I think that we mentioned that. This is a sector that we had invested in the past. This was a very pos...
We have a very positive effect from these investments because we had the chance to increase our quantities in a very resilient market like beverages. Other markets are moving not so in this direction of growth, but are steady or we see some decline. We also have a positive trend in energy networks with our subsidiary in Bulgaria, Sofia Med, where we managed to increase our sales in this market. We see some mixed picture in construction or in industrial applications. Right now, beverage is the most resilient market for the group. I don't see any other question in Q&A, at least, or in the chat. Okay.
Thank you very much for being with us today, and thank you also for your questions. I want to reiterate that we are very pleased with our performance during the first semester of 2025, as we effectively navigated a highly challenging environment. We managed to increase our sales for a second consecutive quarter, we delivered strong profitability, and we continue to improve our net debt position. Looking forward to see you again on our next webcast for the third quarter of 2025. Good afternoon to everyone. Thank you very much.
Good afternoon. Recording stop.