Q2 2020 Ferroglobe PLC Earnings Call
Good morning, ladies and gentlemen, and welcome to Ferroglobe second quarter 2020 earnings call.
This time, all participants ARNA listen only mode.
Later, we will conduct a question and answer session and instructions will be given at that time.
As a reminder, this conference call may be recorded.
I would now like turn the call over could be it you're starting to get caught Ferroglobe Chief Financial Officer, you may begin.
Good morning, everyone and thanks for joining bifida obstacles Lucky to fashion Tempe Conference call. Joining me today I'm I couldn't be lucky that type of people, who don't make aren't easy p.. So I think he investor relations I couldn't have been good of consider before we get this topic with some prepared remarks I go.
To beat up your statement, please turn to slide one at this time.
Even say my management during difficult first corn that that forward looking I based on current expectations. They stuck dose. That's good schools I thought it was supposed to be so my P. Diddy from these forward looking statements can be found instead of looks most recent FCC findings and exceed beach to those findings.
We try to Bendable into now why website Www typical in addition, this discussion includes reference to every deal I guess it did media cost it did and adjusted diluted earnings per share we chat no not yesterday's measures because he lynch it'll be filled I guess I have to <unk> maybe.
I want you know like most recent as she she find it.
Yes, it mixes like piece.
During today's call. We would first review the highlights for Q2 as well as our besides handle gracious and vitamin.
I think we feel like somebody trying to be paid well telephone I said before lunch. It keep drive it should be kind I wasn't shorts.
Finally, we will provide an update on piece to 50 plus.
I would now like to turned the corner over to lock when maybe our Chief Executive Officer next is likely.
Thank you bad Threexx a good morning, good afternoon evening whoever you want.
Before we get into some specifics for departure I want to a knowledge. The continued hard work and dedication of our employees around the world.
That's right off Cobiz 19 continues to impact each of our employees and we're thinking gave very measure possible to ensure a safe working environment.
We are fortunate that our employees have not had any serious given this is today and that's up to 14, indeed, well wed contracted the virus.
Do you recall over.
Furthermore, we can call frequently m. proudly claim that none of these cases were constructed into war.
We think how worried workforce globally for their resilience and with me.
And they have come together doing just trying times to drive going forward.
Our ability to successfully navigate called me 19 as being in large part due to the airports and execution of our crisis management team.
We assembled this theme in the early days of dependent Amy.
Serves as an effective for them for values functional areas such as commercial in procurement to voiced concerns on everyones time basis.
These facilitates communication and apps, that's fine quick solution as the shoes they arise.
Overall for globally is making progress on various operational financial and strategic initiatives.
Acting with the termination an urgency to delever safe and healthy operations improved stability and we anticipate every turn to perfect <unk>.
The strong recovery in the second quarter's financial results. He is a testament to our success in implementing recent initiatives.
By diligently executing Columbia items within our control we have adapted to if we did environment and continue to make progress operationally and financially.
During the second quarter, we have.
Yeah lies higher average prices across older product categories.
We have expanded margins sort of turning the company to a positive quarterly EBITDA.
Improve working capital and increase the cash bonds.
The current environment has forced us to scrutinize each part of the business rationalize costs and improve the efficiency of our operations.
These airports wouldn't be ongoing as we continue to adopt a business to respond to lingering uncertainties associated with the fund they make a cross I work they do change.
Along this line I'm pleased to announce the for money valuation of our business is now being concluded.
And we have commenced this accused of managements Neo strategic plan that will spend three years.
As previously noted we analyze all parts of the business ranging from our commercial strategy 20 section on day to the management of the business in order to identified shortcomings and pinpoint the areas, where we can make changes to announce the company's competitive.
Furnace and drive value creation.
I wouldn't be discussing key takeaways from this exercise later in the presentation.
At this time, the IRA view, our business and current operating environment.
Moving ahead to slide five please.
Second quarter sales were $250 million down 20% from the per year for her.
This decline was primarily attributable to lower volumes, which declined 24.1%, partially offset by average selling prices, which were up seven per se.
During the quarter, we've experienced they slowed down in the Monday, Carlos all product categories.
I want customers reacted to the global Sunday me.
The net loss for the second quarter was 14 medians compared to a net loss of 49.1 million in double your quarter.
The decline in the second quarters net loss was driven by continued cost cutting through operational changes offsetting the decline in sales and driving margin improvement.
And lastly.
Our adjusted EBITDA was positive 22.4 million into second quarter.
Which compares to negative 17.6, meaning that for you in quarter once again.
This improvement was driven by lower input costs positive results from our key technical later, Q Nisha thieves and other cost cutting initiatives implemented at the plant incorporate topics.
[noise]. Although Q2 was marked by continued volume declines offset by a slide to recovery pricing.
As assessed in the company's cost I think.
For us as there is out we saw improvement in our bottom line results despite significantly lower sales.
Further we continue to deliver on improving our working capital position.
We ended the second quarter, we working capital of 321 millions down from 348 million at the end of the first quarter.
During the quarter girls that increased by 9 million to for a that 51 millions even an improvement in our cash balance during the quarter and net debt balance improved by 1 million for balance of 298 millions as of June 30.
In Q2 increase our cash balance ending the quarter, we went out at $53 million of total cash up from one another $44 million into your quarter.
This includes our cash cash equivalent.
Restricted cash and consolidation of the account receivable securitization program.
Next slide the.
[noise] on the next three slides, we will discuss pricing and volume trends earnings contributions and market observations from each of our key products.
Turning first to silicon metal on slide six.
Faro groups are realized average selling price for silicon metal was $2215 per metric ton up 0.1% from $2211 interpret your quarter.
The index pricing in the U.S. was flat, while the European index decreased 2.7% during the second quarter.
Do you have an oil pricing environment was essentially flat as a slowdown in activity was made TWIC card payments throughout the industry.
Additionally.
The buying partner for customers has changed with small quantities and infrequent corridors distorting the index.
The volume trend chart on the Gulf both slide six show had decline in silicon metal shipments of 10.2% over to previous quarter.
We saw similar partner sub activities across our key end markets for seated count.
Aluminium related demand continued to be week in both the U.S. and Europe, largely tied to a slowdown in deal to Mobilely industry.
This has been partially offset by strength in chemicals sales throughout the middle of the quarter.
Demand for silicon for the portable take market continues to suffer.
[noise] silicon metal EBITDA improved from 3.5 million seen Q1, two positive $11.9 million in Q2, driven primarily by cost improvements, partially offset by the impact of lower volumes.
The biggest contributor to our improved CD committal performance was $8.9 million improvement in costs attributable to production costs in Europe, where we have shifted production to the most competitive assets [noise].
On the raw materials side coal and electrode costs as well as consumption efficiencies contributed to the cost benefits during the quarter.
Based on the current buying behavior of our customers. So we anticipate that end market weakness is likely to continue.
We have seen early signs of recovery from the North American outweigh industry in July with demand near peak of influence in Europe. However, the out of business remains sluggish for the chemicals side of the business. We entered the back half of the year a bit more cautious there.
Don't have some major customers such as a greater focus on managing inventory level of Silicons, though.
Overall, it is difficult to go to weather the activity level for silicon demand is attributable to changes in real demand for our customers products or if it is more inventory management of silicon stock by our customers.
Well, we are in regular dialogue with our customers they are mixed signals.
Given the lack of visibility for all participants along the value chain.
And finally, we regard to the ongoing trade case anyways.
We recently announced that positive development.
International Trade Commission as found that U.S. silicon metal producers have been injured by imports from Bosnia Iceland, Malaysia and cutback.
We applaud the Itcs work to date and are confident that the process will up for favorably over the coming month.
I look forward to keeping you informed as we knew milestones and okay.
Next slide fees.
Turning to silicon based alloys on slide seven.
During the quarter, the average selling price increased by 4.3% to $1537, but Tom.
Hi, up from 1474 per metric ton into per year quarter.
In Q1, we continue to make operational changes to ensure our production cost would be more competitive.
In Q2, we further optimized our performance in that week environment by selectively pursuing business that was more profitable and mizzima minimizing theories of inventory build.
The increase in realized pricing.
During the quarter four hour Sealy conveys a lloyds business is primarily attributable to our commercial strategy.
Ferroglobe ever as realized price for Silicon based alloys also benefited from our higher margin specialty Ferroalloys brothers.
Which accounted for approximately 55% of the shipments during the second quarter.
Really conveys a low volumes decline, 35.2% in Q2, two approximately 40000 tons. This significant decline in demand deep two recent quarters.
The second quarter decline is attributable to weaker steel and proud to be demanding body us in Europe.
The steel sector has continued to run at low utilization rate following significant curtailments at the beginning of the year before.
The foundry business is being impacted by the same dynamics I described earlier relating to the auto industries in both the U.S. in Europe.
EBITDA from our Silicon based alloys segment improved from 2.3 millions in Q1 to $7.9 million in Q2, driven by better pricing and cost improvement.
Cost improvements contributed 4.4 millions, which was the result of lower energy cost in Europe, and the Eurs and the further shifting nor production to the most competitive plan.
We also benefited from lower raw material costs, driven by Remelting, ferrosilicon fines and using them in our foundry operations.
We realized.
2.9 million improvement from pricing, which is attributable to product mix and our ability to be more selective in the commercial business.
Volume AD and negative impact of $1.7 million.
To date in Q3, both European at the U.S. index pricing are stable.
This is attributable to the production costs in from silicon across the industry, which avail bumping some market environment.
Next slide please.
Turning now to manganese based alloys.
During the second quarter average selling price increase by approximately 11.8% to $1088 permitted dawn hub from $973 per metric ton in the first quarter.
Volumes declined 25% in the second quarter by approximately 55000 tons due to continued slow down across the steel sector.
Despite this drop in demand manganese based alloys EBITDA increased two positive seven millions in Q2, compared with negative 2.5 meters per year quarter improved pricing due to product mix and lower cost of manganese ore provider that benefit partially.
Early offset by slightly higher costs.
A declining manganese ore prices provided that 3 million benefits to EBITDA.
On the cost side, we were negatively impacted by 900000.
Dollars as lower volume at Sammy impact of fixed cost absorption.
Index pricing for manganese based alloys, Harry main rather flat in Q into Q3, while manganese ore price index has come down steadily since June.
At this time I turn the call over two batteries.
Who will review the financial highlights.
Thank you Michael beginning Greece, it is like Ben.
Sales of 250 million during Q2.
20% Nolan from busy somebody level median of sold in the prior question.
If we can you've seen sales was driven by a 24% decline in sales volumes, partially offset by a 7% increase in Diablo net selling prices.
The declining volumes West Center close all see further capabilities.
The quoted our cost of sales declined by 57%.
Resulting gross margin excluding deal flow of 31 person.
These wells on improvement of 17% over the prior quarter would have liked comparable gross margin was 22%.
Cost of Stacy program in Q2 was primarily attributable to lower energy cost, particularly in Europe, as well as lower cost of manganese ore.
Operating expenses decreased by 3.6 million to 55.1 million dollar.
In Q2, I'll be plot of land position.
Slide 11 operating expenses as a result of lower Commission expenses.
To slow with volume activity.
Q2 operating loss before adjustments was 5.5 million dollar and improvement of 42.8 million dollar EBIT taiyo quality.
Even by lower cost of sales.
Stuff goes in mobile operating expenses as well as hyun all that operating income.
Adjusted EBITDA was positive.
The 2.4 million done that I need 12 months from Milwaukee 17.6 million done that in Q1, adjusted EBITDA margin improved by 14.6 person to 9% in Q2.
Slide 11 please.
The sequential improvement in adjusted MTR quarter over quarter distributable to a few key factors cost improvement contribute 60 point TBN Donna.
Covered the key drivers of the cost it feels like you see view of the seat other properties.
Typically TBT contv at another 10 million dollar to the quarterly EBITDA in Q1 week of seasonal expenses related to the capacity reductions across the platform.
This quarter dust looks at the same block and so 3.3 million done that you said similar to what should that PBT tied to operational adjustments on doesn't see pointing at dollar has to deal with accounting treatment.
Nick cause capitalized causality mandates and finally, the remaining sequencing million Donna instead, we sold over same tier two and mission likes.
During the quarter. We also benefited from a net savings of 4.5 million dollar.
Related to the hit Dolphins costs. This is mainly attributable to have the best one of 2019 bonus accrual.
For around 3.5 million and the positive feedback of play Mcqueen mixes like please.
Okay.
Turning now to slide 12, I will review that our balance sheet in greater detail, where we make improvements to our available cash and working capital with the Tenanting market environment. These improvements are critical for our business.
Gosh unrestricted cash improved to 150.2 million dollar at the end of Q2 up from 144.5 million dollar in prior quarter.
Gross debt increased by approximately 8 million dollar in Q2.
To 451 million dollar.
Why net debt was approximately flat relative to the prior quarter ending at 298 million dollar as of June Thirtyth.
This increase in goes debt reflects an 11 million dollar echo one for the semi annual coupon relating to the senior notes.
Tell us.
Well at approximately 1.4 billion down slightly from one point CTC billion in the prior quarter.
Let's look back up again continue to improve by $26 million into second quarter.
Before we move on.
In addition, I'd point regarding the cash balance.
As we reported in the press release the company so tier two ambitions right subsequent to quarter then into like a novelist.
This resulted in cash proceeds of approximately 33 million dollar given the looming uncertainties in our business. We felt it Wesco then to fund that showed up cash a view the monetization of basis year to emission aside as an attractive solution, particularly at the financing cashless continues.
The company is closely monitoring this demand levels today to mine appropriate production levels and go to the quantum of see it limits and tracked that will need to via the acquired in the later part of 2000, Tempe and or in 2021 next is likely.
We continue to generate positive operating cash flow in season can even by positive EBITDA generation and improvements in working capital of 12 million Doug.
Cash flow from operating activities in Q2 was 38 billion dollar such as cash flow of 90 million in the first quarter.
Cash flow from investing activities, what's made happy by medium done that.
Payment for maintenance Capex remained flat at the moment of 5 million.
Lastly, cash from financing activities with negative 24.5 billion dollar for the quarter.
This is primarily due to the back of bank borrowing prepayments of 20.7 million done that in aggregate we.
We had free cash flow.
DC medium build that Didnt Q2.
Next is now.
Now turning to slide 14.
Do you see was the third consecutive quarter greatly improved our working capital.
He said reduction of 26.2 million done that this reduction is driven by $45 million addiction receivables.
Partially offset by 18.1 million increase in invented.
And our 1 million below net increase in accounts payable.
Turning to the category right.
Our cash balance at the end of Q2 was 153 million dollar compared to 144 million dollar in the prior quarter.
The Q2 balance includes unrestricted cash of 86 million dollar and then no current restricted cash cash equivalents of 28.3 million.
Gosh in cash equivalent includes the cash balance of the accounts receivable securitization program of 38.9 million done that.
Next is on please.
During the quarter, our gross debt increased by 9 million Donna to 461 million done that.
Why our net debt declined 1 million gone up to 298 million done.
The increase.
Gross debt is primarily attributable to an accord in our blunt coupon.
Well for so many of our gross debt as of June Thirtyth. Please refer to cited before in the appendix.
Next is likely.
On the financing side did a few highlights this yet.
Have been excluding options to tap into complete related financing plans sportswear by local government in the countries, where we operate.
Recently, we close up 12.3 million yield funding sports, thereby differential that Mike. This is a casino with potential repayment within five years of MACI and from a cost perspective, it's very attractive. They normally that is obviously your 0.5%.
At this time, we continue to evaluate similar programs in this pain.
In terms to our existing accounts receivable securitization program, we have enough lines discussions to refinance our existing facility.
To close the CQC.
The new pillow, we are pursuing will be more cost effective than our existing program any suspected to release cash quickly in the SPD I will be sending more details on the new facility. Once we close and finally into last one new competencies I'm pleased to announce that we have made.
Significant properties over the Passporting and finalizing the beauty tends to stage with Kevin on potential lenders. We have now negotiating terms sheets, we the intent of closing of funding and new debt facility in October.
With that I tend to talk to Michael who will provide an update well knowledge to thank you.
Thank you batteries now turning to slide 18. Please.
Finally, I want to provide an update on our strategic plan as a reminder, in our per year coal. We highlighted that we were working alongside that Premier consulting company.
To conduct a deeper review of our business with the objective of the then defying process improvements and outpatient changes that will drive efficiency and I asked the economics of the business on both revenue and cost side.
We are first this project with a clear goals within to fight the video creation levers that are going to accelerate the company's or return to profitability.
And create a ferroglobe, but which becomes the global reference for silicon metal and the federal always we produce.
As we look back and recent trends in market activity. It is clear that the competitive environment today is different and just a few years ago.
We have seen new market, then turns a change in trade flows and have experienced shockwaves like the one we are currently facing with the pandemic.
These says enforce the need to transform ferroglobe to ensure that the business is flexible operationally and rare diseases early in two market changes in order to drive profitability for the cycle.
The new strategic plan as a series or specific initiatives identified for the next three years as we successfully execute upon lease plan. We aim to meet the following targets on the topline we think that revenue can be increased by $175 million. This end.
Tracy's not dependent on their recovery volume and pricing pilots plane and be more sharply.
We said targeting pvp that by an incremental one other 50 millions and we will continue improving our working capital, which will contribute $70 million cash.
How are we going to do this.
When we initiated this project, we took an unbiased approach to reviewing our products markets and customers to determine the attractiveness and future profitability of each area and to assess ferroglobe ability to compete effectively prove this cycle.
In terms of markets.
We remain committed to servicing our global client base and leveraging felt looks strong market penetration rate in North America, and Europe to ensure escape.
With regard to products.
However, if you ask off for the attractiveness of all three our key product categories. We we've continued to be an active player in all the products. We currently produce.
Side will be focusing more on expanding our position to develop customized solutions to meet our customers future needs.
Through the years, our company has demonstrated strong R&D capabilities, and we have to get back to driving innovation and focusing on specialty products, which connects asked we've our cash.
In turn this will help ensure and that we realized pricing that appropriately reflects our product quality reliability and commitment.
And lastly regarding customers our strategy sets out to deepen our strategic relationship we have our traditional client base.
There is clear and multiple benefiting collaboration.
On the other side of the spectrum, we will seek to increase our presence with niche radio accounts.
And finally.
With a focus on platform optimization, our objective is to avoid over producing and minimize their east coast profitable sales.
By being more cost competitive and nimble on the operation side, we can be more selective and focus on transactions that generate an attractive writer.
Now I will go into how we will achieve this target next slide please.
At this time I would like to provide some specific insights into the seven value drivers and now they will drive that transformation and help achieve the financial targets, we have say.
The commercial lever ease organized around two major blocks analyzing clients profitability and optimizing commercial opportunities give you a sense our focus would be on portfolio and account management.
And shrink we have the proper customer relationship management tools, and clearly define objectives for each client.
For online management, we require us to redesign our commercial coverage and operating model in line with the product and customers priorities I previously described.
On the pricing side.
We will increase communication and transparency between our commercial and production teams to ensure we are making healthy margin on each sale and walking away from 10. This doesn't mean that requirement.
We also have too easy to how we price product.
As we have learned from recent experience being tied to an index by not be there right format for all transactions, we would be working closely with our customers to ensure ambulatory beneficial model that appropriately compensates us for the quality and reliability we deliver.
Moving to the cost side footprint optimization is one of our key regular drivers.
While one of Ferroglobe score advantages is a large and divest production platform at times it as restricted our ability to make quick changes, particularly during periods of volatility.
Going forward our goal is to ensure that the operating platform is truly modules.
So shifts in production based on need and relative cost can be implemented swiftly at the moment the specific actions, which are being contemplate then do not necessarily translate into full plant shutdowns.
The goal was to identify how we can maintain our capacity footprint by optimizing production to the most competitive plans and furnaces.
For example, this may mean that we ended up shutting down one or more furnaces implants, which have several furnaces.
By focusing on the most efficient and productive assets and Rightsizing the facility cost structure accordingly.
We effectively create smaller but more profitable plan.
While maintaining the optionality to scale back up once market conditions improve.
The next value creation driver is continuous plant efficiency improvement over the past two years, we've been discussing key technical metrics.
Which consist of specific initiatives, which in essence process, meaning nice waste and improve overall efficiency to drive down costs.
We have already realized significant benefits from this program by sharing best practices and benchmarking key metrics between plans.
Over the past few months the team has completed their revenue and every introduced a series of new initiatives you did defied across all three product categories, which will drive further savings without any incremental cost.
The next lever is as Ginny and overhead cost reduction.
While we have made some progress in both of these areas. We feel there is much cost that can be permanently taken out at the plan.
As well as the corporate level.
By implementing better tracking of costs and increasing accountability.
We not only get the benefit of cost reduction, but mitigate todays call cost creep overtime.
Another major creation level.
He is centralized procurement.
We are shaping the organization so that the purchasing of many consumables is purchased centrally.
This will allow us to better track our needs and now so our ability to shade of purchases and buying in bulk.
Something in better terms, so we have our suppliers. Furthermore, by having a central buyer can learn and compare what the plants have historically done we can make better decisions on what works best and now to standardize certain key purchases throughout the organization.
And lastly, the improvement on working capital.
Why we have demonstrated steady improvements in working capital days still room for further efficiency.
Levered goes hand in hand with several of the other value creation levers for example, as part of footprint optimization. We are trying to create a platform, which quickly react to market changes and avoids inventory build seemingly as part of the commercial strategy, we will be school.
Routine icing payment terms and other provisions, which enhances our cash compassion.
These are good examples of the I'll various functional teams will be working together to drive change and extract value going forward.
With the leg work down to identify key value levers as specific initiatives, it's time to execute.
Successful execution of such as strategic plan is dependent on every one within the organization.
We need to break away from old habits and change the culture that requires proper oversight and management.
As such.
Senior management has been redesigning part of the organization to ensure that we have the proper people and tools in place to eat our targets.
We have commenced execution of new strategic plan.
While some of the actions already motion it will take some time to implement all of them and realize their full benefits.
That's taken the better part of this year to get to this point.
I assume the CEO role recognizing the potential of this company, but I also realized a lot needed to be change.
I am proud of the teams work, so far but even more excited that we're going to begin the execution of what we believe we'll make ferroglobe a global leader gloss all its product.
As I noted.
We anticipate that over the next two years the strategic plan would provide an incremental 150 millions of EBITDA contribution.
We expect our commercial strategy initiatives to contribute approximately 45 millions of this target.
While various cost drivers would contribute to the remaining one other than $5 million.
Furthermore, the working capital reduction effort will contribute an incremental 70 millions of cash to be clear.
We consider this projected EBITDA announcement to be above any baseline recovering the prices of volumes.
Boat and other way even the market demand remains the same as it is today, we expect the initiative to deliver an incremental $150 million of our EBITDA.
At this time, we will now like to open the time for questions. Operator. Please go ahead.
Thank you again, ladies and gentlemen, if he wants to ask a question at this time. Please press Star then one on you touched on telephone. If your question has been anthem I wish to remove yourself from the Q. Please press the pound key.
Our first question comes from the line of near term results with Stifel. Your line is open. Please go ahead.
Hi, Good morning, Thank you for the update on the strategic plan.
A couple of questions on the slide 18, and 19 first one is with the footprint and product optimization is there any capex that's needed to upgrade assets and are there any environmental.
Reclamation.
Liabilities that are triggered from this plan as well.
Well the.
Regarding regarding Capex there will be.
Expenses expenses related to.
Some some labor costs.
No major.
Capital capital investment.
And do we have not.
To the any.
Potential remediation cost.
In annual dues.
Pvps, excluding one case that I prefer not to mention at this stage.
And then so over the next three year period, how can we think about what makes sense capex levels will be.
Yes, we already answered this question in the past this.
We expect to to increase.
Our capital spending from from the current relate to a rate of 70 75 million sprint.
Okay.
Okay, and then in terms of thinking about the working capital improvement of $70 million.
You're also going to have the top line improvement, which is going to require it.
Segment, so is that 70 million improvement.
Hi.
Cash benefit that.
Is reflective of the strategy versus how how much working capital would have been required for the growth in revenue.
My question makes sense.
Yeah, and make sense patterns can clearly replied to view.
Yes, so as part of the strategy exercise and we plan to videos.
The working capital, especially in Thats held for sale.
So it means.
That effectively this is 70 million share that view nation will come through a cash and release.
I know what is that the exercise.
And this will be a mix of our combination I'll say efforts between Inventergys, mainly obviously.
At this win I need to have line emailing account receivables in now when it comes with the combination of the three items. We team is working.
As the top line grows there will be a net working capital investments numbers correct.
Exactly exactly let this addition type of say this will be in the years, yes.
Okay and then.
Earlier in the presentation on slide.
Yes.
I'm, sorry slide southern.
How should we think about the.
Price sensitivity in the fourth quarter Silicon alloys too.
What's happening in spot market.
I missed the last part of the question.
Oh, so there's some asking what's what's the pricing sensitivity to.
To the spot market.
So this both market.
Well in in our in our case the.
We have part of our business and our contracts and battle.
The business is a spot.
What we have nowadays.
In the last quarter.
He is an increase.
Amount of transactions.
Based on lower volumes, so much more erratic order path that.
As of course.
Impacted the average price.
Of.
Of these of this alloys.
So then the book how much is contracted versus spot.
We we do not we do not.
Reported this this number.
Okay.
Right and then.
Last question regarding some of the capital market activities.
What amount of cash can we think about being released with the new Hey, our program.
Well not be a releasing a this information, but obviously when do that on buccal successful unless we closed the transaction.
Okay. That's all I had thank you ms. on.
Okay.
Next question comes from online.
By all adults will line up on Pall mall.
Hey, guys good quarter, when you say 150 million I want to know sort of from one quarter is you know if it was the first quarter, which is like negative five annualized.
That would get you to a lower number if you took 22 million annualize now you're at $88 million and you add 150 to that and it's really quite spectacular. So I just I want to know sort of 150 from what quarter.
Well 150 is the caution on a yearly basis. So we plan to our distribution on a 150 millions of EBITDA on a yearly basis, and then where do you want to that we're going to have ups and downs [laughter] in there like typical of a cyclical business, but to what we will.
I want to prevent is the situation, where we end up delivering the negative EBITDA. So we want to establish a solution 150 of onefifty on a yearly basis.
Okay. So I mean again, you know there's going to be and EBITDA. The overall targets I again I just.
You know.
First quarter was negative second quarter was quite positive.
You know I guess the question would be are you targeting to have total EBITDA of more than one.
Absolutely absolutely if you look at the.
If you look at this cycle of.
Of our EBTDA, we have been delivering between minus 37, two plus 230, what I can recall in terms of numbers.
And to these numbers you have to our day 150.
Okay, I see so it'd be like China been average of those are some yeah.
All right and brand.
It's one of those things when you hold your conference call two thirds through the quarter.
I know you're facing headwinds in manganese.
But you know.
Some of your other metrics as you're progressing what your strategic plan are you still tracking positively.
Well, we don't do we do not comment on on on the on the current.
The current quarter.
All we can see users sort of a.
Stabilization of the manganese ore price in recent weeks this is for.
Everybody can contract.
And then then what I'm asking really is are you, making good progress on your working capital and cost cutting efforts in the third quarter as well.
Well we are.
We are we have started the implementation of the is accused on a plan.
As as we speak and like I say eight hour my time aurizon to achieve.
What I consider ambitious but achievable targets it will take two years.
All right and then the last one I know you're you're negotiating a new bank agreement Youll talk about it when you get it.
But and I think you're seeking a lot of flexibility and better terms, but you. Your bonds are trading at a steep steep discount would one of the terms that you seek to negotiate would be the ability to buyback bonds at a discount.
What we are.
Aiming on on the discussion as we say we have had difficulties to gain.
To extend the maturity as we discussed on previous a course, we aim for Yatin looking to all the options.
But we are coyote dicing lease maturity the extension of the maturity.
And our they're negotiating negotiations ongoing with bondholders.
I cannot disclose anything at this point.
Hi, guys Alright. Thank you guys going to say you get quite a maturity will come up tenant by the end of year implementation.
Plan, if you could extend maturities that would be very much.
That's it for me. Thank you guys. Thank you.
Thank you.
[noise] same Q.
And I'm showing no further questions and then I would like to turn the conference back over Demarco Leidy for any further remarks.
[noise] [noise] that concludes our second quarter 2020 earnings call as I mentioned at the beginning of the call. This quarter's performance is certainly trending in the right direction.
However, we have much more work to do especially with regard to execution of our new strategic plan.
I am confident that the actions. We are currently undertaking along with the new initiatives, which are being developed as part of our strategic plan, we let us get there and ensure stronger and more competitive ferroglobe.
Thanks again for your participation we look forward to hearing from you on the next goal and a great day.
Ladies ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all does.
Everyone have a great day.
[music].