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performance from the Silicon Products division and the Carbon Solutions
division. The quarter concludes a strong year for Elkem with an all-time high
operating revenue and result. The board has proposed a dividend of NOK 6.00 per
share, equivalent to 40% of the profit for the year, in line with Elkem’s
dividend policy.
Elkem’s total operating income for the fourth quarter 2022 was NOK 10,404
million, which was in line with the corresponding quarter in 2021. Earnings
before interest, taxes, depreciation and amortisation (EBITDA) amounted to NOK
1,787 million in the quarter, compared to NOK 3,059 million in the fourth
quarter 2021. EBITDA for the full year amounted to NOK 12,887 million, an
increase of 65% from the previous record year 2021.
Earnings per share (EPS) was NOK 1.41 in the quarter and NOK 15.09 year-to-date.
The board has proposed a dividend of NOK 6.00 per share. The dividend for 2022
amounts to 40% of profit for the year and provides for a dividend yield of 17%
based on the year’s average share price.
“2022 was a second consecutive year with record revenues and results for Elkem.
This is a testament to our strong cost and market positions, as well as good
deliveries by our global team. We have also continued to position the company
for future growth by launching an updated corporate strategy focusing on dual
-play growth and green leadership. As we enter 2023, the market sentiment is
impacted by macroeconomic uncertainty and lower growth in key sectors. Elkem’s
integrated value chain is providing a sustainable competitive edge as a basis
for good profitability also going forward,” says Elkem’s CEO, Helge Aasen.
The Silicon Products and Carbon Solutions divisions have delivered another
strong quarter, based on high sales prices and favourable cost positions. The
result for the Silicones division was however weak, severely impacted by the
Covid situation in China. In addition, the Silicones division’s result was
impacted by inventory write downs and extraordinary maintenance costs amounting
to approximately NOK 175 million.
The result for the fourth quarter demonstrates the strength of Elkem’s
diversified product portfolio and balanced geographical market positions.
Elkem’s dual play strategy is based on balanced geographic growth across the
value chain. This has helped to stabilise the earnings in the quarter, as the
weak market sentiment in China has been offset by more favourable conditions in
other markets.
As part of the company’s dual-play growth strategy, Elkem has decided to invest
around NOK 200 million to increase its production capacity in Brazil. The
investment is based on well-known technology and constitutes an expansion of a
running Elkem facility, thereby further improving productivity and
profitability. The increased production of high-quality products will be
supplied to a major customer on a long-term contract. The expansion is expected
to generate additional sales in excess of NOK 300 million per year from 2024.
In line with the company’s green leadership strategy, Elkem was awarded double A
- scores from CDP for the company’s efforts on climate and forests. The company
achieved a B score on water security. In the fourth quarter, Elkem also closed
final terms on its first sustainability linked loan agreement, linking the
margins on the facilities to key sustainability goals.
In December, Elkem placed EUR 200 million in the Schuldschein market on 4 and 6
-year tenors. EUR 52 million was disbursed in December 2022, while EUR 148
million was disbursed in January 2023. The net proceeds were partly used to
refinance maturing Schuldschein loans and has further improved Elkem’s maturity
profile.
The group’s equity as at 31 December 2022 amounted to NOK 28,774 million, which
gave a ratio of equity to total assets of 55%. Net interest-bearing debt was NOK
2,615 million, which gave a ratio of net interest-bearing debt to EBITDA of
0.2x. Elkem had cash and cash equivalents of NOK 9,255 million as at 31 December
2022 and undrawn credit lines of more than NOK 5,000 million.
Market sentiment is impacted by macroeconomic uncertainty and lower growth in
key sectors. The silicones market in China is weak going into the first quarter
but expected to improve after Chinese New Year. In addition, Silicones could be
negatively impacted by strikes in France. The overall market sentiment for
Silicon Products is weak, but significant capacity curtailments seem to balance
the market at current level. The reference prices for silicon and ferrosilicon
are somewhat down from the fourth quarter 2022. Carbon Solutions has seen lower
demand due to closures in steel, but markets are expected to be stable in the
first quarter.
For further information, please contact:
Odd-Geir Lyngstad
VP Finance & Investor Relations
Tel: +47 976 72 806
Email: odd-geir.lyngstad@elkem.com
Fredrik Norman
VP Corporate Communications & Public Affairs
Tel: +47 918 66 567
E-mail: fredrik.normann@elkem.com
About Elkem
Elkem is one of the world’s leading providers of advanced silicon-based
materials shaping a better and more sustainable future. The company develops
silicones, silicon products and carbon solutions by combining natural raw
materials, renewable energy and human ingenuity. Elkem helps its customers
create and improve essential innovations like electric mobility, digital
communications, health and personal care as well as smarter and more sustainable
cities. With a strong track record since 1904, its global team of more than
7,300 people has a joint commitment to stakeholders: Delivering your potential.
In 2022, Elkem obtained a Platinum score from EcoVadis, which rated the company
among the world’s top 1% on sustainability transparency, and the company
achieved an operating income of NOK 45.9 billion. Elkem is listed on the Oslo
Stock Exchange (ticker: ELK). www.elkem.com
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