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continued strong performance in the Silicon Products division and the Carbon
Solutions division. The result for the Silicones division was weak, impacted by
challenging market conditions, maintenance stop, and inventory write down.
Elkem’s total operating income for the second quarter 2023 was NOK 9,258
million, which was down from the corresponding quarter in 2022, mainly explained
by lower sales prices and lower sales volumes. Earnings before interest, taxes,
depreciation and amortisation (EBITDA) amounted to NOK 1,039 million in the
quarter, compared an all-time high EBITDA of NOK 3,924 million in second quarter
last year. Earnings per share (EPS) was NOK 0.06 in the quarter and NOK 1.56
year-to-date.
The Silicon Products and Carbon Solutions divisions continue to deliver strong
results, based on superior cost and market positions. The result for Silicon
Products was negatively impacted by maintenance stops at Thamshavn and Rana,
estimated to NOK 80 million. The result for the Silicones division was weak,
impacted by lower sales prices and lower sales volumes. In addition, the result
for the Silicones division was negatively impacted by maintenance stop in China
of NOK 100 million and inventory write down of NOK 70 million.
“After two years of record results for Elkem, we currently face more challenging
markets. Under these conditions, we are pleased to deliver an overall good
performance in the second quarter. We also deliberately carry out maintenance
and growth investments in line with our strategy of dual-play growth and green
leadership, positioning Elkem for demand recovery and improved market
conditions. The longer-term trends of the green and digital transitions remain
strong, driving demand for advanced materials shaping a better and more
sustainable future,” says Elkem’s CEO, Helge Aasen.
In the second quarter, Elkem ASA acquired VUM, a Slovak producer of carbon
materials. The transaction will further increase Elkem’s capacity and competence
in attractive specialty markets. Elkem expects the acquisition to contribute
with additional annual sales of around NOK 360 million. The acquisition was part
of Elkem’s strategy of growth and specialisation and will improve the
flexibility to handle different raw materials and provide synergies to Elkem’s
existing operations.
In addition, Elkem is investing in upgrades and digitalisation to enhance
efficiency and cost improvements. The maintenance and improvement projects at
the Thamshavn and Rana plants in Norway were successfully completed in the
second quarter. Both plants have restarted production and are well positioned
for future demand recovery, with enhanced competitive positions. In Bremanger,
Norway, a new state-of-the-art control room has been opened and in Lyon, France,
Elkem is developing a complete digital chain leveraging on advances in
digitalisation and AI.
Due to weak results in the Silicones division, Elkem is taking measures to
counter the challenging market conditions. A systematic improvement work is
organised along several dimensions with focus on fixed cost reductions, capacity
optimisation, increased waste recycling and by-product values, and capex
optimisation.
The group’s equity as at 30 June 2023 amounted to NOK 26,109 million, which gave
a ratio of equity to total assets of 50%. Net interest-bearing debt was NOK
8,191 million, which gave a ratio of net interest-bearing debt to EBITDA of
1.1x. Elkem had cash and cash equivalents of NOK 6,609 million as at 30 June
2023 and undrawn credit lines of more than NOK 6,000 million.
There is a continued weak market sentiment going into the third quarter. Elkem
is however, well positioned to benefit from a recovery due to strong market
positions and robust financials. The Silicones markets are expected to remain
challenging, and Elkem plans to run at reduced capacity to optimise product mix.
Prices for Silicon Products are in a downward trajectory going into third
quarter, but this is partially countered by lower raw material costs. The
capacity utilisation is expected to be higher, following completion of the
maintenance projects in Norway. Carbon Solutions’ result is expected to remain
at a good level, despite weak markets.
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 achieved an operating income of NOK 45.9 billion and CDP ratings
of A- on climate and forest. Elkem is listed on the Oslo Stock Exchange (ticker:
ELK), where the company is also included in the ESG Index. www.elkem.com
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