Ferroglobe Reports Results for Second Quarter of 2018

2018-08-23

Aug. 21, 2018 - Ferroglobe PLC, the world’s leading producer of silicon metal, and a leading silicon-and manganese-based specialty alloys producer, today announced results for the second quarter of 2018.

In Q2 2018, Ferroglobe posted a net profit of $66.0 million, or $0.39 per share on a fully diluted basis. On an adjusted basis, Q2 2018 net profit was $25.7 million, or $0.14 per share on a fully diluted basis.

Q2 2018 reported EBITDA was $130.9 million, up from $93.5 million in the prior quarter. On an adjusted basis, Q2 2018 EBITDA was $86.3 million, down 3.7% from Q1 2018 adjusted EBITDA of $89.6 million. The Company reported adjusted EBITDA margin of 14.8% for Q2 2018, compared to adjusted EBITDA margin of 16.0% for Q1 2018. Year-to-date (H1 2018) adjusted EBITDA was $175.9 million, up 135% from the same period in 2017.

The differences between reported and adjusted figures derive from the bargain purchase gain that has been recorded as a result of the Company’s acquisition of manganese alloys plants at Mo I Rana, Norway and Dunkirk, France.

During the second quarter, cash flow used for operations was $4.6 million, with working capital increasing by $70.0 million during the period. As a consequence, net debt was $475.3 million as of June 30, 2018, up from $449.3 million as of March 31, 2018.

Sales in Q2 2018 totaled $583.0 million, up 4.0% from $560.7 million in Q1 2018. During Q2 2018, the average selling prices for:

• Silicon metal increased by 0.4% to $2,773/MT in Q2 2018, as compared to $2,762/MT in Q1 2018;
• Silicon-based alloys decreased by 2.4% to $1,908/MT in Q2 2018, as compared to $1,956/MT in Q1 2018; and
• Manganese-based alloys decreased by 5.2% to $1,304/MT in Q2 2018, as compared to $1,375/MT in Q1 2018.

While sales volumes of:

• Silicon metal experienced a 6.2% decrease quarter-over-quarter,
• Silicon-based alloys experienced a 2.5% increase quarter-over-quarter, and
• Manganese-based alloys experienced a 51.0% increase quarter-over-quarter.

“This was a solid quarter for Ferroglobe, culminating a first half of the year which confirms the improved fundamentals of our business and validates the positive momentum in the markets we are serving,” said Pedro Larrea, CEO of Ferroglobe. “In the year to date we have significantly increased volumes and selling prices and our EBITDA has more than doubled compared with the same period last year. The steel industries in North America and Europe - the main end markets for most of our alloys - are experiencing strong demand and high capacity utilizations in the wake of recent trade protection measures. Prices  of our products have remained broadly stable overall, and current supply/demand dynamics in our industry should support continued healthy pricing.”