The €2 billion EBITDA target
Alongside the optimization of its financial structure, the listed company has activated its entire investment pipeline with the mid-term goal of reaching €2 billion in EBITDA. Because Metlen anticipates significant asset sales from its energy project portfolio within the year, a substantial portion of its outstanding debt will be repaid, while capital deployment will accelerate across four primary pillars.
Specifically, the chairman of Metlen highlighted a series of key milestones: the completion of a 330 MW energy storageproject within the third quarter of this year; an increase in alumina production to 1.25 million tons starting in the fourth quarter of 2027; the 65% completion of its circular metals plant, targeting production by the first quarter of 2027; the commencement of gallium production in the fourth quarter of 2027; strategic defense sector investments; and structural preparations for METKA to raise capital and expand into projects beyond traditional infrastructure and concessions.
The relationship with EDF
Looking at future growth prospects, Metlen aims for accelerated activation in battery storage projects—where substantial investments are anticipated nationwide—and meeting the exploding global demand for gallium. Crucially, the company is also looking to expand its existing partnership with French utility giant EDF. Beyond executing engineering, procurement, and construction (EPC) energy contracts, Metlen is actively discussing joint investment initiatives with the French group. To reinforce this strategic alliance, information indicates that the chairman of EDF recently traveled to Athens to hold a high-level meeting with Mr. Mytilineos.
Challenges fall under my responsibility
Addressing past project cost overruns in the United Kingdom, Mr. Mytilineos characterized the issues as a "significant learning experience." He emphasized: "As executive chairman, the manner in which these operational challenges were managed ultimately falls under my responsibility. In hindsight, certain issues could have been mitigated sooner." The company has since reinforced its management structures, tightened internal oversight procedures, and enhanced corporate accountability, with the ultimate objective of establishing Metlen as a benchmark corporation within the FTSE 100 index.
The CEO, Mr. Christos Gavalas, drew attention to the company’s exceptionally high liquidity buffer of €3.7 billion, stating that robust cash flows will optimize leverage and allow the company to drive further profitability. The target is to reduce the net debt-to-EBITDA ratio to 2, a goal corroborated by CFO Ms. F. Ioannou, who attributed this deleveraging to projected earnings growth and debt reduction fueled by cash inflows from energy asset sales.
Surging demand for gallium – METKA on track, defense expands
Regarding the gallium investment, Mr. Mytilineos stated that, for the first time in corporate history, demand for the material is tracking at 50 times the company’s current available output. According to projections, production is expected to reach 50 tons by 2028. Concurrently, the European Union is moving forward with the creation of a physical delivery trading platform in Rotterdam. Gallium market prices currently stand at $2,500 per kilogram, compared to just $400 in previous years. Metlen produces the material at half the cost of competitors in China; however, prospective buyers are requesting price caps before entering into long-term supply contracts.
In the metal recovery from industrial residues segment, initial production at the Sindos facility will focus on copper, nickel, cobalt, and zinc oxides. The proprietary investment is the result of extensive in-house research and development, spearheaded by the founder's son, Mr. G. Mytilineos. In the defense sector, positive developments are anticipated, with the company expected to mirror METKA’s trajectory in operational profitability. However, the division currently has no active domestic contracts and is awaiting the Greek government’s commitment to mandating a minimum 25% domestic industrial participation rate.
Special mention was made regarding the upcoming stock market listing of METKA. A public offering will grant the unit greater corporate autonomy, direct access to capital markets, and the flexibility to expand into unexpected new sectors. The subsidiary currently boasts a turnover of €1 billion and zero debt. In energy storage, the ideal operational model involves supplying power directly to the group’s aluminum smelting complex, thereby eliminating volatile annual electricity costs linked to natural gas.
Aluminum market dynamics and PPC cooperation
Substantial volume deficits persist in the global aluminum market, and experts believe it will take considerable time for the supply-demand balance to normalize. Metlen has successfully locked in high selling prices for the next 2.5 years and intends to maintain this hedging strategy. Consequently, even if market prices retreat, the company will remain insulated at higher profitability thresholds.
When questioned about short-selling funds, Mr. Mytilineos remarked that they lack an understanding of the company's internal visibility, noting that Metlen's primary advantage is knowing its exact pipeline of secured business. When these funds are eventually forced to cover their positions and find shares, it will trigger a crowded exit—a classic short squeeze phenomenon. He reiterated that "he who laughs last, laughs best."
Regarding PPC (Public Power Corporation), the company expects to maintain its constructive partnership in project construction following PPC’s impressive capital increase. A notable highlight of the annual general meeting was that all items on the official agenda received overwhelming shareholder approval ratings, ranging from 95.65% to 98.90%. Among the approved resolutions was a share buyback program authorizing the repurchase of up to 10% of the company's total outstanding share capital under specific regulatory conditions.
Dimitris Pafilas
dpafilas@yahoo.com
www.bankingnews.gr
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