Elkem reported an EBITDA of NOK 1,030 million in the second quarter 2024. This
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is in line with the corresponding quarter last year, and an improvement compared
to the preceding three quarters.
“Improved profitability was primarily driven by a strong operational performance
as part of Elkem’s comprehensive improvement programme. Market conditions have
remained challenging in the quarter,” says Elkem CEO Helge Aasen.
Elkem’s total operating income for the second quarter 2024 was NOK 8,490
million, which was down 6% compared to the second quarter 2023, but up from the
preceding quarters. Earnings before interest, taxes, depreciation and
amortisation (EBITDA) was NOK 1,030 million, which was in line with the
corresponding quarter last year, and an improvement compared to the preceding
three quarters. Earnings per share (EPS) was NOK 1.35 in the quarter, and NOK
0.65 year-to-date.
The result for the Silicones division improved, but from a weak level. Market
conditions are still weak, due to soft demand and Chinese overcapacity which has
caused continued pressure on commodity sales prices. The Silicon Products
division delivered good results, despite lower silicon sales in the quarter. The
Carbon Solutions division delivered a strong result, based on favourable cost
development and good sales volume.
Elkem’s silicones expansion project in China was finalised in May 2024, on time
and on budget. The start-up was successful and has exceeded expectations.
“The financial impact will likely be modest until the production line is fully
ramped up, but positive contributions were achieved already in the second
quarter. The new line will improve Elkem’s cost position, environmental
performance, and deliver higher upstream product quality,” says Helge Aasen.
Elkem has introduced a comprehensive improvement programme to counter weak macro
-economic conditions and challenging markets. The programme is ahead of plan.
The target is to improve EBITDA by at least NOK 1.5 billion and to reduce
capital expenditures by NOK 2.0 billion compared to 2023. By the end of second
quarter, Elkem has realised EBITDA improvements of NOK 0.6 billion, with an
estimated full-year effect of NOK 1.3 billion for 2024. Elkem’s capital
expenditures amounted to NOK 1.3 billion by the end of the second quarter, well
on track to reach the target reduction.
Elkem has a high focus on sustainability and is researching a groundbreaking
concept for silicon production, which aims to eliminate nearly all direct CO2
emissions. The concept involves capturing and recycling the carbon in the
process off-gas and reusing it in the production process. Enova has granted
Elkem NOK 31 million for a medium scale pilot, to be carried out in
Kristiansand, Norway, at the newly acquired premises of REC Solar Norway.
The group’s equity as at 30 June 2024 amounted to NOK 25,351 million, which gave
a ratio of equity to total assets of 51%. Net interest-bearing debt was NOK
10,333 million, which gave a ratio of net interest-bearing debt to EBITDA of
3.5x, unchanged from last quarter. Elkem had cash and cash equivalents of NOK
5,442 million as at 30 June 2024, and undrawn credit lines of more than NOK
6,000 million.
The market sentiment is relatively weak but showing signs of gradual
improvement. Silicones expects improved demand in Europe and US, but the Chinese
market is still hampered by overcapacity. Elkem’s focus on EBITDA improvements
and the new production line are expected to have positive effects. Silicon
Products expects to benefit from improved market conditions, countering
seasonally lower activity in Europe during the summer holiday. Carbon Solutions
expects still weak demand but capitalises on strong and diverse market
positions.
For further information, please contact:
Odd-Geir Lyngstad
VP Finance & Investor Relations
Tel: +47 976 72 806
Email: odd-geir.lyngstad@elkem.com
Maria Ekornes Myhre
Acting VP Corporate Communications and Public Affairs
Tel: +47 994 12 707
E-mail: maria.ekornes.myhre@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
7,400 people has a joint commitment to stakeholders: Delivering your potential.
In 2023, Elkem achieved an operating income of NOK 35.5 billion and CDP ratings
of A on Forests, and A- on Climate Change and Water Security. 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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