Ladies and gentlemen, welcome. Thank you for joining the live webcast of ElvalHalcor for the Q1 of 2026 trading update. Mr. Angelos Giazitzoglou, Deputy Chief Financial Officer of the group, and I, Dimitrios Theodorakatos, Consolidation and IR Manager of the group, we are going to provide you with insights over our performance. After the end of the presentation, we will conduct a Q&A session where you're welcome to ask any questions regarding our group and its performance. Now, let's move on to presentation and the key highlights for the period. ElvalHalcor marked a solid start, amid the challenging and volatile economic environment. The group managed to increase sales volume by 6% to 156,000 tons, driven by the increased demand from aluminum segment, and mostly for packaging and transportation-related products.
Increased operational profitability, adjusted EBITDA, was appointed by lower energy costs and higher sales volume, which partially offset by inflationary pressures, reached EUR 66 million, up by 4% compared to prior year respective period. Earnings before taxes surged to EUR 68 million, mostly affected by the positive accounting metal results, which rose by EUR 31 million year-on-year. A significant increase in LME prices during the Q1 of 2026 led to increased working capital and debt needs. Despite that, net debt stood at EUR 622 million, down by EUR 48 million from the Q1 of 2025, thanks to robust operational profitability. The sharp rise in LME prices at the last quarter of 2025, which continued during the Q1 of 2026, resulted to EUR 70 million increase from the year-end.
Deleveraging continued for one more quarter, with net debt to adjusted EBITDA ratio improved to 2.6 from 2.7 in Q1 of 2025, and remains stable from the December 31st, 2025. Now, I will turn the floor over to Mr. Giazitzoglou for his comments.
Thank you, Dimitrios. Welcome. Before diving into the numbers, let's look at the operating environment in the Q1 of 2026. TTF prices tended to be lower in the Q1 compared to Q1 of 2025. The average price was down by 19% to EUR 38 per MWh . Electricity prices moved in the same direction, with the average price ending 28% lower than the same period of 2025 at EUR 95 per MWh . Inflation was slightly lower at 2.1% when interest rates declined significantly by 20%. As a result of all these trends, energy and financial costs reduced compared to the Q1 of 2025, creating a tailwind for margins. Let's look at metal prices. LME prices had a totally different trajectory in both metals.
After the imposition of tariffs in 2025 and disruptions caused by the shortage in raw materials, as well as the uptrending prices, another geopolitical tension arose this time and rocked the boat. Aluminium prices rose significantly in Q1 of 2026 by 9% compared to 2025. Copper prices skyrocketed by 24%. The effects of the elevated prices were inevitable in our working capital and metal results. Let's move now to our cost structure. In Q1 of 2026, consolidated costs were broadly flat year-on-year at EUR 177 million versus EUR 175 million in Q1 of 2025, a EUR 2 million increase or roughly 1%. Employee benefits increased to 29% from 28%, while third-party fees rose to 17% from 15%, consistent with inflationary pressures and external service costs. Energy fell to 13% from 17%, a reduction of approximately EUR 7 million, driven by lower average TTF and power prices, as we discussed earlier.
Transportation was stable at 12%, depreciation dropped to 10% from 11%, and maintenance and other operating remained broadly flat. As a takeaway, lower energy costs partially offset increases in labor and service costs. Let's see the volumes quarter by quarter. The Q1 started from a stronger base in the aluminium segment than in copper. Aluminium sales rose to 112,000 tons from 104,000 tons in Q1 2025, a strong increase of 8%. Copper moves to 45,000 tons from 44,000 tons, up by 1%, indicating a much flatter demand. In both segments, it is clear that the sales slowdown we experienced during the H2 of 2025 has now rebounded to a more positive trajectory. Let's move to markets.
The Q1 of 2026 versus 2025 shows a shift in mix across specific markets in both segments. In the Aluminum Segment, the rigid packaging remains the dominant market with 50% in total sales, while flexible packaging declines to 13% from 15%. Transportation also climbed to 14% from 12%. Building and construction, on the other hand, declined slightly to 10% from 11%, while all other markets remained broadly stable. Packaging and transportation are fueling the increase in volumes in the Aluminum Segment. In the copper segment, industrial applications increased to 29% from 26%, and energy and power networks rose to 22% from 20%, indicating stronger demand. Building and construction down to 18% from 23%, reflecting weaker activity in 2026. Other markets moved in a more stable direction. Take a picture about geographical areas.
During the Q1 , we saw a clear shift in the geographical revenue mix in both Segments. In the Aluminum Segment, the revenue mix is broadly stable year-on-year. The EU remains dominant at 66% versus 68%. The Americas increase modestly to 14% from 13%. Greece moves to 5% from 4%. Overall, aluminum indicates only limited mix reallocation with small offsets across regions rather than a structural shift. In the Copper Segment, the change is more pronounced. The EU's share expands to 71% from 67%, while the Americas falls sharply from 4% from 10%. This resulted from the imposition of tariffs by the US administration in the H2 of 2025. As we saw on the slide with volumes, the Segment managed to weather the reshuffling and replace those quantities in other markets. The Segment delivered an overall increase.
The key takeaway from the copper part is a clear shift in sales mix away from the Americas and towards to EU, while aluminum remained more balanced with a stable regional profile. Let's move to our financials. On this slide, the graphs depict a clear and positive start for the Q1 of 2026 for both metals. Aluminum adjusted rises from 39 in Q1 of 2025 to 40 in 2026, a gain of 3%, while copper increases from 25 to 36, a 5% growth. Both segments demonstrated a significant rebound from the last two quarters of 2025, when we experienced a decline due to disruptions from the imposition of U.S. tariffs. Let's go to see the profit per ton. Year-over-year, earnings performance varied across the two segments.
Aluminum adjusted EBITDA per ton moved from EUR 378 in 2025 to EUR 362 in 2026, a decline of 4%, indicating more normalization after the prior year peak. Of course, we have to say that the environment in which we operate in after the imposition of tariffs is very different from what it used to be, especially in the raw material market. The scrap shortages, along with the increase in prices that began in the H2 of 2025, squeezed margins. Even though the situation is now closer to normal levels, the pressure is still evident and erodes part of our profits. Copper, on the other hand, rose from EUR 554 -EUR 574, an improvement of 4%. A strategic reduction in lower-margin products, along with segment's ongoing focus on value-added markets, enhanced profitability. Now, moving on. Q1 shows a clear year-on-year improvement versus 2025 across the consolidated P&L figures.
Volumes increased in both segments, supporting performance. Adjusted EBITDA is above the previous year's levels at EUR 66 million, rebounding significantly from the results of the H2 of 2025 and remaining higher than the corresponding period of the previous year. Our revenue was boosted by the elevated aluminum prices to EUR 1 billion. EBITDA skyrocketed to EUR 94 million from EUR 71 million, a gain of EUR 23 million or 33%, fueled by the uptrend in metal prices. That is confirmed by metal results moving to EUR 38 million from EUR 7 million, EUR 31 million uplift, while earnings before taxes improves to EUR 68 million from EUR 45 million, up by 50%. Now, let's see the EBT evolution. EBT in Q1 2026 increased to EUR 68 million from EUR 45 million in the corresponding period of 2025, a year-on-year improvement of EUR 23 million.
Volume added EUR 5 million, led by the aluminum segment, mostly. On the other hand, competitive pricing pressure in parts of the portfolio and a less favorable mix weighed on margins by EUR 3 million. SG&A also reduced EBT by EUR 3 million due to wage inflation. Of course, the main driver of this strong EBT result is the metal results, which contributed EUR 31 million. Now from profits, let's see the cash. EBITDA of EUR 94 million was up 33% year-on-year, indicating a stronger earnings base supported by a better metal results across both segments. Despite the improvement, free cash flow did not fully reflect the gain and remained negative at EUR 14 million. Main driver of this is the change of working capital by EUR 70 million, driven by sharply higher LME prices.
CapEx of EUR 27 million added a further drain, while finance activities provided EUR 43 million inflow, helping offset the net cash impact. Let's see how the working capital saved during the Q1 of 2026. Q1 of 2026 shows a clear impact on working capital, as we said, from elevated LME prices in aluminum and copper. Working capital rose 13% to EUR 627 million from EUR 557 million at the end of 2025, an increase of EUR 70 million. I want to reiterate that this increase also resulted from higher inventories. That decision was made at the end of the previous year to prevent any disruption to our production due to a shortage of raw materials. Working capital as a percentage of sales increased to roughly 17% from 15% in December of 2025.
Despite that headwind, net debt improved significantly versus Q1 of 2025 and slightly increased from the end of 2025. At EUR 622 million at the end of the Q1 over here, we are still on track to meet our objectives to keep our leverage ratio lower than three times. At 2.6, we remain in line with our targets. Financial costs declined to EUR 9 million from EUR 10 million, down about 9%, consistent with lower average debt and a more favorable rate environment. Main takeaway from this performance is that higher metal-driven working capital remains a cash flow headwind. Marginal resilience and disciplined financing continue to support balance sheet quality and financial credibility. Last but not least, let's see our CapEx. The company takes a very conservative investment profile.
Following a period in which we invested heavily, especially in the aluminum segment, we have now entered a phase of capitalizing on those investments. Developments in the global trade environment and the ongoing geopolitical tensions require a more prudent approach. Strategically, we prioritize future growth and competitive positioning. Before we take your questions, let me summarize the company's performance. The Q1 of 2026 started with positive momentum despite the challenged environment that had shaped the previous year. The company delivered a robust performance, achieving higher sales volumes and improved operational profitability. Despite the pressures in working capital, we managed to keep net debt lower than the respective period of 2025 and slightly above the end of the year. The group has demonstrated resilience and remains vigilant for the upcoming developments. We are ready to take your questions.
Okay. Thank you all for your attention. Thank you, Angelos. Now we may proceed to the Q&A session. You may place your question either by raising your hand or by submitting in the Q&A tab at the bottom of your screen. We have one question from Mr. Kavafis.
Just for you, but I don't see anything on my screen. Maybe I have to wait.
It's, uh.
Can you hear me now?
Yes.
Hi, everyone. Congrats on a good set of results. Thanks for taking my question. I've got one on the CapEx on aluminium. Can you give us some color exactly where does it go? Which areas are you investing currently? Thank you.
As I said, in the past, we heavily invested in certain specific markets that had to do with packaging. Packaging is a market that shows a steady growth in Europe and in U.S. As I said, right now we are capitalizing on these investments, and under these conditions, safe from the ongoing geopolitical tensions, selective capital allocation is a priority for the company. We always make plans. We are constantly working on different scenarios, but nothing is final or approved yet. As I said, we have now entered a phase of capitalizing on previous investments, and we examine all potential opportunities to push the button for the next step of our investments plan.
Thank you.
One, we have one more question from Mr. Manos Hatzidakis.
Hello. Thank you for taking my question. Congratulations for the good set of results. Just if you can give us an indication of your capacity utilization, at what rate are we moving in the first five months of the year? If you have witnessed any shift in demand from geographies that are under tensions, maybe this demand has shifted to other locations and this counterbalanced maybe a deficit from the Middle East or whenever this reduction came. Thank you.
Okay, I will start from the second part of your question about markets. Definitely, the imposition of tariffs created a lot of disruptions in the U.S. market. As you saw in our presentation, we managed to keep and increase our share in this market. We have long-term relationships with our clients. We are a very trusted supplier for them and we managed to keep these quantities in this market, this very profitable market. No one can dispute that, of course, we have a reallocation from this market to EU, from countries and producers from Asia and India. This creates an additional pressure for us. Again, as you saw, sales that we lost in U.S., especially in the copper segment, were gained in EU from the copper segment of our company.
We managed to weather all these difficult situations without losing any quantities, but achieving to increase them also. Demand is here. We see that there is demand. Still, we don't see at the same direction some increases in prices, but demand is there, and we are ready to capitalize any opportunity. Excuse me?
No, please go on.
The free capacity for the aluminium segment is around, let's say, no more than 10%. In the copper segment, it's a little bit higher. We have the potential to increase even more our share in the copper segment and less ability to increase quantities in the aluminium segment if we don't decide to invest in this direction.
That's clear. Thank you very much.
I have one more question. Yes. Ioannis Stratopoulos.
Could you give us some insight for the energy cost impact on the company? If it is electricity, petrol products or natural gas prices that impact more, is there hedging or fixed contracts in place? I will say for another time that energy is not a game changer for ElvalHalcor. It's a very critical cost driver. For Q1 of 2026, the trend for both TTF electricity and natural gas, we saw prices going down. The persistence in geopolitical tension in the Gulf is expected to increase prices in the upcoming months. Yes, we expect to see some pressure from the energy price during the rest of the year.
If we use some hedging instruments to mitigate the risks from the volatility of prices, yes, we do have some hedging instruments for the natural gas. We try to cover all the long-term contracts that we have with our customers in order to avoid any increased cost from the volatility of price. In the electricity part of our energy cost, we don't have any hedging instruments to use. Of course, we have some contracts for renewable sources of energy, this is a way that we are trying to mitigate any risk, again, from the volatility of prices in electricity. Definitely, we expect to see some actions from the Greek government or from the EU in order to have a more regulated playing field.
Industries like us who are operating in an environment with elevated prices like the prices in Greece, are not losing any of our competitiveness against other companies that are operating in areas with lower electricity or natural electricity, mostly electricity prices.
We have one question from some other note.
Yeah. Can you hear me?
Yes.
Hello. Thank you for the presentation. Just a quick one on scrap availability. You mentioned some disruptions in H2 and during full year results. There is no mention of scrap availability on this Q1 press read. Is it still an issue for you? The situation is stabilizing or deteriorating or improving a bit. Can you give us some color on that? Thank you.
Scrap remains a complicated issue, but not at the levels that we experienced last year. The imposition of tariffs created significant challenges for the European scrap market, in both metals, leading to market distortions, as you said, and scrap shortages for the European companies. There is no doubt that this difficult environment did not come without a cost to our profitability. The increased prices squeezed part of our margins. Fortunately, the situation right now is more stable. It's not what we used to have, let's say, during 2024, but prices are significantly lower than it was in 2025, at least second semester of 2025. We are covered at least, for our supplies in scrap. We don't experience any issues from shortages in EU market.
Of course, again, this is an area that we expect some actions from the EU to protect from the scrap to going out from Europe. We have to say that this is not an issue of raw material supply. It is an issue for the energy also. The scrap that goes out from Europe means that energy is going out from Europe, and this is a very critical issue for industries like us. That's why we are taking so many initiatives to, let's say, push the European Union to take some measures in order to protect these scrap leakage. For the Q1 of 2026, and I must say that even for the first semester of 2026, we are covered for the needs of our raw materials in order not to have any disruptions in our productions.
Yeah. Thank you.
It seems that we don't have any more questions. Okay. Thank you all for joining. Thank you also for your questions. I hope to see you again on our webcast on the August 4th for the first semester financial results. Thank you very much. Bye-bye.