(News Bulletin 247) – The group announced that this sale would bring it 410 million euros, and increase its gross operating profit by 480 million euros.

Umicore has decided it’s time to monetize its golden stockings. The Belgian metal recycling group announced plans on Wednesday to sell its stranded gold stocks for around 410 million euros ($476 million), to take advantage of record prices for the metal.

Gold exceeded $4,000 per ounce for the first time on Wednesday, benefiting from investors’ appetite for assets deemed safe in the face of increased economic and geopolitical uncertainty and expectations of further interest rate reductions by the US Federal Reserve (Fed).

Umicore shares climbed more than 6.2% to 16.38 euros on the Brussels Stock Exchange around 1:50 p.m., their highest level in more than a year. The company’s market capitalization reached 4.1 billion euros.

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Capital gain of 370 million euros

In a statement, Umicore said it would sell and lease its stranded inventory within its Jewelry and Industrial Metals and Precious Metals Refining divisions.

The Belgian group produces semi-finished gold used in jewelry, electronics and many other industries.

It also recycles gold from e-waste or refines it into industrial components such as wires.

The sale will generate a net capital gain after tax of 370 million euros as well as a contribution to Ebitda (gross operating surplus) of around 480 million euros.

The operation represents a significant release of liquidity thanks to the strength of gold prices, underlines in a note Chetan Udeshi, analyst at JP Morgan. “In the case of gold, the company felt it was more efficient to rent the metal rather than own it, as the gold rental market is very liquid and rental costs are also attractive with a relatively stable trend,” he adds.

(With Reuters)