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Elkem reports strong result in 2018

2019-03-11

Mar. 11, 2019 - With more than 110 years of history, 2018 has been a milestone for Elkem with the re-listing of the company on Oslo Børs on 22 March and large acquisitions in China.


Operating income for the Elkem group amounted to NOK 25,887 million compared to NOK 21,403 million in 2017. The operating income increased by 21%, due to higher income from all divisions. Silicones operating income increased by 30% due to increased sales volumes and higher prices. Silicon Materials operating income increased by 3% supported by favourable prices, however lower sales volumes. Foundry Products operating income increased by 20% due to higher prices and improved sales volume and mix. Carbon managed to increase operating income by 20% largely due to improved sales mix.


Elkem’s EBITDA ended at strong NOK 5,793 million compared to NOK 3,188 million in 2017. The corresponding margin improved from 15% in 2017 to 22% in 2018. The improvement in EBITDA was supported by positive development in earnings from all segments, and in particular Silicones explaining 78% of the improved EBITDA for the year. Silicones experienced improved production and sales mix, in addition to favourable prices in China for most part of the year. Silicon Materials and Foundry Products also contributed to improved earnings, which were largely driven by improved sales prices countered only partly by higher raw material prices. Carbon managed to improve earnings helped by price increase more than offsetting increased raw material prices in the same period.


Operating profit was NOK 4,142 million in 2018 compared to NOK 1,971 million in 2017. Amortisations and depreciations was NOK 1,263 million in 2018 compared to NOK 1,244 million in 2017. Impairment losses was NOK 8 million in 2018 compared to NOK 17 million in 2017. Other items was NOK 380 million negative in 2018 compared to NOK 44 million positive in 2017. Other items are largely related to change in fair value of power contracts and IPO expenses.


Profit before income tax ended at NOK 3,792 million for the year compared to NOK 1,519 million in 2017. Share of profit from equity accounted financial investments was NOK 23 million negative in 2018 related to Elkem ASA’s share of the Energy Recovery project at Salten Energigjenvinning AS, compared to NOK 1 million negative in 2017. Finance income was NOK 42 million and foreign exchange gains was NOK 19 million in 2018 compared to NOK 30 million and NOK 8 million negative in 2017 respectively. Finance expenses were NOK 388 million negative compared to NOK 474 million negative last year. The reduced net interest bearing debt throughout 2018 resulted in lower finance expenses.


The consolidated profit for the year was NOK 3,367 million, including NOK 425 million tax expense for the year, giving an effective tax rate of 11%. The low effective tax rate was attributed to utilisation of tax loss carry forward in China and France.


The earnings per share was NOK 5.74 per share in 2018 compared to NOK 2.08 per share in 2017.

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