Q2 2022 Ferroglobe PLC Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Yes.
Good morning, ladies and gentlemen, and welcome to southern club's second quarter 'twenty to 'twenty two earnings call. At this time all participants are in a 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 is being recorded.
I would now like to turn the call over to Gaurav Mehta private clubs President of North America, and executive Vice President of corporate strategy Technology, and Investor Relations you may begin.
Good morning, everyone and thank you for joining fair group's second quarter 2022 conference call. Joining me today are Marco Levi, our Chief Executive Officer, Beatrice Garcia coats, our Chief Financial Officer, and Ben why Olivier, our Chief Technology, and innovation Officer before we get started with some prepared remarks I'm going to read a brief.
Please turn to slide two at this time.
Statements made by management. During this conference call that are forward looking are based on current expectations.
Risk factors that could cause actual results to differ materially from those forward looking statements can be found in fair gloves, and most recent SEC filings and the exhibits to those filings which are available on our webpage www Dot <unk> Dot Com. In addition, this discussion includes references to EBITDA adjusted EBITDA adjust.
The gross debt net debt and adjusted diluted earnings per share, which are non IR I FRS measures reconciliation of these non I FRS measures maybe found in our most recent SEC filings at this time I would like to turn the call over to our CEO Marco Levi Slide four please.
Good morning, or good afternoon, everyone.
I'm really thrilled to present, our second quarter results.
Which set a new company record there in terms of our quarterly revenues adjusted EBITDA margins profitability, our net debt level.
In fact, the second quarter marks the sixth consecutive quarter dating back to Q4, 2020, where we have consistently improved our performance in areas such as sales and adjusted EBITDA.
Please keep in mind that adjusted EBITDA was negative in 2019, when this management team took over.
I am extremely proud that we have been able to deliver adjusted EBITDA improvement in nine out of the last 10 quarters.
Despite challenges posed by Covid.
Patrick rises and most recently, the Russia and Ukraine.
These quarterly results are reflection of the strong performance across our portfolio of products, coupled with the ongoing focus on cost reduction improved operational flexibility and quicker response to capitalize on market opportunities.
We have been pretty clear on our priorities and I am pleased that we are delivering on all fronts. In fact, we are excited to be over delivering in some areas.
For example, we continue to uncover new pockets of value during our Investor day, a few weeks back we announced our revised target of 225 million of run rate EBITDA benefit from the various transformation areas.
Specific to the second quarter.
Our revenues increased 18% to $841 million.
And we achieved adjusted EBITDA of $303 million, an increase of 26% over the prior year quarter.
Our adjusted EBITDA margin further improved by 234 basis points to 36%.
And our earnings per share only fully diluted basis was positive 98 stands at 23% increase over 80 cents per diluted share we delivered last quarter.
Moreover, we continue to improve our cash generation.
A result, our net debt at June 30 was $194 million the lowest in the company history.
With the acceleration in cash generation, we repurchased some of our senior notes during the quarter and subsequently closed on the redemption of our 9% Super Senior notes in July .
Overall, our business continues to perform well across the portfolio we are vigilant.
The macro environment continues to remain uncertain with high inflation and the continued energy crisis posing a.
Headwinds.
We expect to generate solid cash flows into the second half of the year. Despite this lingering headwinds.
Before we move on I want to highlight the positive developments relating to our energy costs, specifically in France.
While we have fixed energy prices in France. This year in May we received notification from our energy provider that the French government decided to increase the relative portion of our EM, which lowers our realized cost of energy and we received a net benefit.
Of approximately $31 million.
This quarter.
Approximately $20 million of this impact was realized in our P&L this quarter with the remaining amount being capitalized as inventory, which would be realized later in the year.
To be clear this is not a one off benefit we anticipate a comparable adjustment to our energy cost in France for the second half of the year as well. Additionally.
Additionally.
Our fixed price contracting crowds provides some insulation from the current drought and potentially other factors.
In the event there is a shortage of power. We also benefit from our unique ability to quickly modulate production and redirect power back to the grid at an attractive rate I'll bite reducing output moves.
Moving to slide five please.
Let's talk about silicon.
Our silicon metal business had another strong quarter on the back of solid supply demand fundamentals.
The index pricing in the U S.
Europe dropped during the quarter of bite by different level.
The U S index Eldorado flat through May before seeing a decline in June .
Nonetheless, the U S ended Q2 with pricing above $8700 per ton and Thats up flat things.
In Europe . This actually increased until early June reaching 4800 euros per tonne before ending the quarter just over 4000 euros per tonne.
Overall.
We remain encouraged with the pricing environment and need to put these pricing levels into perspective relative to historical levels. After eating unprecedented levels at the end of 2020.
The pace of decline this year has been much lower than what was initially expected by <unk>, which is positive for our results.
Furthermore gear.
Given our exposure to index based pricing, we are getting the benefit of higher realized prices in other words the.
Pricing average in Q2 will positively impact us during the third quarter.
Our shipments increased to approximately 63000 tons during the quarter.
This was in part attributable to strong demand as well as the restart of the second furnace at the stainmaster facility during the quarter.
In terms of end market demand the chemicals that continues to be the strongest across our core geographies.
The aluminum sector continues to face headwinds from higher energy prices in Europe , as well as continued supply chain disruption adversely impacting our tow demand.
Initially we were hopeful for some recovery on the automotive side during the back half of the year.
Given the continued uncertainty around energy and the current macro picture rebuilt with higher interest rates, we are not factoring in any further recovery in the auto end market for this year.
We'll come back to <unk>.
Interesting developments on the photovoltaic later in today's presentation.
Overall, we saw a significant improvement in the contribution from silicon metal Silicon metal revenues increased 13, 7%, we've adjusted EBITDA increased by 15, 5%.
Margins for this part of the business improve further reaching 49, 2% in Q2.
On the cost side.
We benefited from the decrease in energy cost in France as detailed on the slide while our average realized cost of energy in Spain, improving quarter over quarter.
The volatility continues.
Just last week, the energy price, we're back above $300 per megawatt hour.
We're seeing companies along the entire value chain approach the back half of the year with more caution.
While there are pockets of demand correction, we're seeing the supply demand tension holding supporting favorable pricing levels, whilst again most of our sales for this part of the business are in this space and will benefit from the strong Q2 pricing.
Pricing slide six please.
Let's talk about.
Silicon based alloys.
Silicon based alloy product category was the stronger performer during the quarter.
Our sales grow.
11, 5%, while adjusted EBITDA for this product category grew 23, 9% during the quarter.
Resulting in adjusted EBITDA margins of 41, 1%.
Sales volumes were flat quarter over quarter, but we did realize a 11, 3% pricing improvement, which was primarily the result of the Russia Ukraine conflict.
Demand for our Silicon based alloys and was strong across the U S Europe and South Africa during the quarter.
In fact, we could have probably sold higher volumes, but with Spain operating at minimal load, our total shipments were flat quarter over quarter.
Looking into the back half of the year, we think our customers will be per chasing with greater caution as take capacity, particularly in Europe is being curtailed.
Overall, we will continue to drive our strategy to Orient this portfolio of products to our higher margin specialty products.
And toward higher priced condo products moving to slide seven please.
Let's talk about manganese alloys now.
This part of our portfolio has been impacted by the conflict is Ukraine as a major supplier of manganese alloys into Europe .
As we entered the second quarter, we quickly picked up on the uncertainty that was present given the conflict and we quickly ramped up production to capitalize on the situation.
During the quarter, we had 29% increase in shipments to approximately 97000 tons.
While we continue to get some pricing appreciation with the average realized price increasing three 2% during Q2.
Overall, our sales increased 33%.
While adjusted EBITDA grew 61, 4% to $32 $9 million.
Margin expanded by 300 basis points to 17, 1%.
Looking ahead, we expect volumes to revert back towards our recent historical levels.
Many steel customers.
Certainly voice caution during the recent.
Quarterly calls.
The sentiment coupled with continued higher energy prices and other input costs puts us in a more prudent state and we will manage the asset portfolio responsibly.
Overall, a strong performance by all three product categories.
Now I would like to turn the call to Gaurav Mehta due to connectivity issues with my CFO battery Scott.
Thank you Marco and good morning, good afternoon.
I think I can I can talk can you hear me.
Yes. Please go ahead Beatrice.
Thank you very much and I saw that the connection.
Okay.
And good morning, or good afternoon all please.
Please turn to the income statement on slide nine.
During the quarter, our top line grew by 80% to a record $841 million.
Batesville revenue across all our product categories.
Nathan and manganese based alloys experienced volume growth over the first quarter.
Stronger pricing in Silicon base, and manganese based alloys contribute to higher revenues and cost management has been a priority and during the quarter. We continued to drive cost improvement despite high inflationary pressures and higher energy cost due to Spain.
As a result, our cost of sales improved to 44% so 48% in Q1.
Operationally the plants ran well.
Quarter with minimal disruptions.
<unk> mine that we are constantly prioritizing our capex is spent this year and so far this appears to be working quite well.
After reporting record adjusted EBITDA margin of 33, 7% in Q1, our Q2 adjusted EBITDA margin.
Further to 36, 1% up to help us.
Four basis points over the prior record quarter.
Our diluted earnings per share increased to <unk> 98 in Q2.
33% over the <unk> 80 reported in Q1.
It is likely.
Our adjusted EBITDA increased by $62 million during the quarter.
$303 million the largest driver of this was the growth in volumes.
Adding approximately 250, <unk> and to a lesser extent they drove money pricing in some product areas, which contribute $34 million.
The cost side.
Inflationary pressures across a number of key inputs such as anecdotes based oncology.
That said, we were able to offset more of the beef increases with the positive energy ADESA.
Which date back approximately $30 million I think you do.
Mentioned earlier, we will continue to benefit from these projects through the second half of 2022.
So in Q2.
The overall impact of energy prices in Spain was positive $5 7 million.
Quarter basis.
I bet realized cost of endogenous. Thank you bill by approximately 15%.
We continue to face a lot of volatility in energy prices in the spring and into the current quarter.
Slide 11 please.
Our stock before was in Q2, so a significant increase in our cash balance to take out the $7 million.
$151 million from the prior quarter with improvements in our cash balance our net debt was $194 million with glad that and which implies a net leverage ratio of zero point 16, our gross debt balance was $500 million.
Of course <unk>.
Which remains relatively high compared to our $200 million significant deleveraging of gross debt remains a top priority for us.
The value of our assets totaled $1 nine millions out of which the book value of equity was $637 million that we have set a target for working capital as a percentage of sales.
21%.
Quarter, we were slightly below this level at 24%.
Slide 12 please.
We ended Q2 with an all time high cash balance.
Millions of dollars.
In our new <unk>.
The liquidity was over $400 million at quoted in our net debt was also at the lowest point in company history at $194 million the gross debt.
About $500 million.
Flex the 19 million so open market repurchase of our 975 senior notes during the quarter, but does not reflect the successful redemption of the $60 million of 9% Super Senior notes, which occur only in July next slide please.
With Q2, we generated record operating cash flow at all had this well had the $65 million a significant jump from.
$66 million in Q1, it's also the third consecutive quarter with positive operating cash flow.
Operating cash flow was driven by robust earnings.
Kelly upset with our cash comes from shell for working capital of $91 million, which is meaningfully lower than the $168 million cash consumption for working copy that in Q1.
During the quarter the actual cash impact of our Capex is spent was $13 7 million up from $9 1 million in Q1. The actual Capex was spent for the first half so that approximately $31 million with the cash impact being <unk> media, we have been tightening.
Our capex target for the year of $75 million.
Please keep in mind that the timing of the actual cash flow impact of the Capex is spent may differ from the balance sheet impact.
Second quarter, our debt cash flow Westwood $136 million and free cash flow totaled 151 billion.
Going forward, we are focused on keeping our working capital around the 21% of sales level.
Slide 14 please.
In addition to the record financial results, we successfully executed a number of initiatives aimed at strengthening our balance sheet for some time, we discuss I think back on asset based revolver, which was part of our company that just took the prior to the 2021 financing.
Third we announced a new 100 billion facility, which bolstered our liquidity by leveraging our account receivable was an event you don't have that.
Uh huh.
Neal facility was undrawn at closing and an attractive rate space would suffer plus a spread of 150 will have the 75 basis points. In addition to the deliberate of depth. We also seek to lower our cost of capital.
D C.
And then Michele estep.
In terms of deliberation with repurchase approximately $90 million of face value of the nine 375 senior notes in the open market during the month of June .
Average price of one or one.
And subsequent to quarter end, we successfully redeemed the entire 60 million of our 9% supersede the adults in July .
Further supporting our priorities in terms of gross debt reduction.
As we generate cash.
Cash flows and lowered our quantum of debt and cost of capital the credit profile of our company's improving in fact, Moody's credit agency upgrade the corporate family rating to <unk> in June and upgraded the 975 senior notes.
In 2025 to be three <unk>.
This is at the stomach to the work we are doing at the execution of our plan overall.
<unk> continues to be proud of our achievements and fill the company in a great position to thrive.
This time I'll turn the call back over to Michael for a few updates, but a few noteworthy corporate madness.
Thank you batteries now turning to slide 16. Please.
As you've just heard there is a lot to be excited about us you'll see the trajectory of our financial performance.
Beyond the record results. We have also made some tremendous advancements in other areas some of which I would like to highlight.
During our recent Investor day, we stress the significance of our transformation plan in terms of the value creation, but also with regards to the capabilities we are developing.
As we have now passed the 18 month Mark in the execution phase of this plan, we are advancing at a faster pace than anticipated, but more importantly, we're identifying new pockets of value for the organization.
As a result, we revised our run rate target to $225 million up.
The initial target of $180 million by 2024.
We have also discussed our inaugural ESG report on recent calls and I am proud to announce that report has been published last month.
If you have not already seen it please visit our corporate website and look under sustainability for the full report.
Fair Globe is 100% committed to ESG and this is an important milestone in the journey for our company.
I would like to thank our organization for their dedication in this critical area and continued hard work as we transition from the planning to execution phase to reach our targets.
On the product innovation side.
Moving forward each day, recognizing the criticality of silicon metal for energy transition.
Yeah.
We recently announced the milestone of industrial production of up to 99 point, 995% purity silicon at our plant in Malaysia.
The nominal capacity is $59 per year. This is based on appropriate very technology, which is very cost effective and environmentally friendly as it doesn't use any chemicals team.
A very high processing yield.
We also commissioned and started up the first Micrometric milling facility in our favor global innovation Center in Spain and stable year.
The nominal capacity is 300 tons per year, and we designed it to offer maximum flexibility, whilst ensuring IP royalty levels in order to tailor solutions for our customers.
These volumes are not big but keep in mind that the economics on these volumes are much higher.
More importantly, the momentum is building with more customers expressing interest. So we will continue to increase volumes steadily.
Our goal is to continue to grow our capacity in agreement with our customers in all our end markets. Furthermore.
On the energy transition story, we are seeing that the energy crisis as a new focus on the photovoltaic industry and we think these trends present data mendes opportunity for further growth.
Given the growing interest by government to explore an end to end local solar value chain, we signed an mou with a longstanding customer <unk> silicon.
Through the Mou, we're committing to our.
Sorry, we're committing our U S asset base.
I purity silicone metal very C.
Aimed at jointly establishing a low carb will traceable U S based solar supply chain.
Now.
We recognize that there are many factors that play here, especially as it relates to new government policies, but the fact that these types of topics are on top of government agendas is very promising for the future demand of our core products.
Once again, the remainder of the amount of things going on that causes us to get excited about the future.
I would say from the beginning that this was going to be slow and steady journey focused on transformation February recovery and value creation.
Today record earnings should be viewed as fair and validation in our team and our plan.
Our outperformance is not only due to market conditions, but the actions that we have been driving for nearly two years now.
There is a lot more work.
To be done and we remain committed to reaching our goals, while navigating a period of uncertainty as macro picture barebones at.
At this time I'll ask the operator to please open the line for questions.
Thank you as a reminder, if you wish to ask a question you will need to press star one and one on your telephone and wait.
Your name to be announced once again, if you would like to ask a question you will need to press star one on one on your telephone keypad. Please standby, while we compile the Q&A roster.
Okay.
Yes.
And we will now take our first question. Thank you.
Please standby.
And your first question today comes from Martin Englert from Seaport Research Partners. Please go ahead. Your line is open.
Hello, Good afternoon, everyone.
Hi, Mark Hi, Mark.
Hello can you provide any update regarding power contracts in Spain and then.
For France, as well into next year.
Well, France continued to benefit from the government program.
In 2023 as it is in the second half.
Okay.
Let me start from.
From France and then.
Our new CEO , Benjamin Crespi, probably can elaborate a little bit more.
No Martin we have a contract in France, so the energy the parameters through 2022.
In this context, there are two components, one is fixed and the other one.
One is that variable market component right.
Alright.
What happened is that at the end of May 2020 to the French government decided to increase the debt.
The fixed part.
From 100 to 120 Terawatt for 2022.
In order to reduce the exposure to the spot market for residential and high energy intensive industry and as a result, we have received $29 5 million benefits.
A million euros benefit in France like like mentioned.
In my in my report.
Post 2022, we have entered in a new two year contract.
We've dealt with a local supplier based on the same.
The two components.
This contract will allow us to leverage our flexibility to minimize our exposure to spot market and give some visibility on the evolving.
And is it cost.
To underline that today, the relative waiting for 2000 22025 between fixed and variable.
Not being.
Finalized yet.
Vince I mean anything else you want to add on that.
Yes.
I think you've covered it pretty well Michael.
Okay.
Martina I guess satisfied about France.
Yes, so it sounds like there is going to be a renewed contract in place post 2022.
No visibility if the government is going to extend.
Or condos relative weightings between fixed and variable will shake out just yet is that correct.
Correct.
Got it.
And how are things progressing in Spain.
Yes.
In Spain is a little bit more complicated.
Uh huh.
Not the Francis.
Is it better.
Well first of all I mentioned that.
We had a lower cost of energy in the second quarter. This is why we.
Brian our assets in Spain at a decent rate in the second quarter.
Tony we had a cost of 209.
Dollars per megawatt hour versus <unk> 52 in the first quarter.
Yeah.
What's happening in the second quarter is also.
Banish government.
Some measures to cap.
The gas.
Price between 40, and 50 level, but this these measures have not been.
Effective meaning that they have slightly reduced our cost of energy.
But.
The cost of energy yesterday was.
About 300 euros per megawatt in Spain.
And this tells me that the measures that have been taken have not been effective.
We are still working hard on.
Having ppas in place as of January two 2023.
We have term sheets on the table, which are under negotiation, but we have not finalized any negotiation yet.
Our PPA.
Yes.
Okay.
Okay. Thank you for all the detail on that and maybe taking a step back.
And looking across the cost per ton on the segments here, yes, what are the expectations for sequential changes.
To the degree that you have visibility industry Q versus Q, yeah, Yeah, you're right the degree of visibility.
I would say alloys will stay flat quarter over quarter, both manganese in.
And silicon based alloys overall.
Silicon, we will have a cost increase between 3% and 5%.
Thank you for the detail there.
Given the spot prices have been declining somewhat across the metals best.
Yes.
There are some partial delay gives you, though given the widening contrast, but any updated thoughts on the asp's across the businesses Q on Q here into <unk>.
Yes.
Of course.
It is true that the.
Pricing overall is coming down.
Across the portfolio.
But I have to say that.
There is going down it matches the lowest pace.
And what we expected.
I would say all across.
Our portfolio also because we were coming from his throat price levels.
At the end of.
2021.
Being specific by product if you look at civic of metal.
The market today is very liquid, especially in North America.
And.
The index is holding in U S.
While in Europe , the prices start eroding, but then I would say they are sort of.
Of stabilize.
And in China, which is always a reference.
Yesterday, we got the news that prices were going substantially up.
Due to some lack of capacity some of some of the Chinese regions. So.
I will say volatility is the rule of the game, but we are still counting on silicon.
The price is.
<unk> profit.
Switching to ferrous silicon or silicon alloys.
During the quarter prices increased mainly due to the <unk>.
Impact of Russia, and Ukraine conflict.
I must say that we didn't see.
Too much of an effect.
In the U S. We have expected.
A lot of shortage of ferrosilicon in U S from Russia that has not occurred.
In Q2.
Price overall in Europe .
Yeah.
Under pressure, mainly due to Chinese increased Chinese exports.
Due to the slowdown in China, we have seen all across the portfolio and increase.
Sure.
Passport Chinese products.
Considering manganese alloys.
There have been two key factors some pricing one of course of the war.
We've reduced exports outside of Ukraine.
But then the market has become very attractive during the quarter for the Indian producers.
<unk> penetrated.
European market at a level that has never been seen before we've a negative but a substantial negative impact.
On pricing.
At the same time, the cost is going down because manganese ore.
Is significantly going down.
Okay. So some modest headwinds I think laurent wholly unexpected given.
Some of the prices were.
Sure.
Still substantial book of the business that was based on.
Two Q lagging index spot prices.
Jerry over in Q3 Q on Q.
David.
Yes, I forgot to underline this but this is well known that we have this index prices. So whatever you see for Q2 gets applied in Q3.
Okay.
Very helpful. Thank you maybe one last one if I could.
On working capital, which has been managed well within the targets, but looking at <unk> and just more broadly over the back half of the year do you anticipate a religious.
What gives you say about potential Meg.
Capital release there.
Yes, we expect to release.
Working capital.
In Q3, which is going to be a key contributor to our estimated positive cash flow in Q3.
Okay. Thank you for all that and congratulations on navigating the environment. The good results progress Derisking the balance sheet.
Thank you Marty.
Thank you.
We will now go to our next question.
Please standby.
And your next question comes from the line of Brian <unk> from Baird. Please go ahead. Your line is open.
Good afternoon, Mark one for you Chris.
Good afternoon, Brian .
Two questions for you first Beatrice on the goal of reducing debt to $200 million gross.
Obviously, the second lien notes are callable today, but at a high price so.
My question is what is your sense of timing on achieving that goal.
Yes, I'll take DSM.
This quarter they would have been the starting.
Looking at <unk>, Brian show.
We detail a couple of things here first we did use the.
With reputation on the open market the $90 million of the notes.
And on the other side and we own.
As a subsequent event.
With it with chase of redeem.
Super Senior right. So you will see the bhakti.
You have the BG, Dave, but the Q2, but you will see that with TD bank.
See if Joe that they need.
Say, a journey to get to get data from the $500 million to the $200 million.
And what we what we plan to do so.
One side, we will not be quick.
Tediously watching what we could do ATM shelf replicase senior notes the 975 from one side, we are allowed to do that.
The other side and you saw that our credit rating.
Reed.
Upgraded to <unk> in June and then in <unk> for Atlas.
So we're studying opportunities what is the best moment for us to tap into the debt.
Market.
April debate on whether it would be.
Market opportunities.
But these have anyway.
It brought that target date for a redemption of the trust.
Good.
Understood. That's helpful. And then I don't think you've ever disclosed this but.
Given some of the concerns just regarding European manufactured question I understand you're getting some relief on the energy side, but can you either qualitatively or quantitatively.
Split or provide a split between the profitability.
North America versus Europe .
Yes, you want to take that one Michael or.
While we do not.
We do not look at the business in this way.
We do not report data.
Split by geography.
Understood.
I appreciate the color. Thank you.
Thank you.
Thank you.
Thank you.
Once again.
If you'd like to ask a question. Please press star one on one on your telephone keypad.
We will now take your next question.
And your next question comes from the line of Thomas Murphy Aegean Capital. Please go ahead. Your line is open.
Thank you.
My question was asked by Brian .
Was answered so it was around the timing.
Getting to that $200 million gross debt number.
So.
As I said thats been answered so thank you.
Thank you anyway.
Great great quarter by the way great quarter. Thank you.
Yes.
Thank you.
We will now take our next question.
And the question comes from.
Gregory Bennett apologies from as if you'd just bear with me one second your line will be <unk> shortly.
Gregory you are now a pen.
Good afternoon, I'm, new to your company, but.
I listened to your investor presentation.
Serve light exponential growth.
The use of silicon.
I think that was reflected in the United States and Spain, but.
How long of a reserve like do you have are you going to need to acquire additional reserves in the future.
Yes.
This is an excellent question.
You referred to of course reserves.
We have a very good reserves in.
In Spain.
We have very healthy reserves in South Africa.
We.
Looking for new reserves in North America.
So.
Are there assets for sale or is this something that you would do like a greenfield site.
We are exploring both options.
Okay.
You.
In your Investor Day, and I think the previous call about South Africa, and about possibly bringing that online, but you want it.
Long term contracts or commitments I didn't I don't think you said anything about it today what's.
What's the status of that today.
Well I would keep the surprise for the next quarter or no.
The.
The situation is the following in the project is proceeding like we have to start up the plant.
At this stage.
We keep our commitment to go to the board at the end of September with our recommendation to restart the plant.
In terms of timing.
The amount of furnace is that we're going to restart.
Okay.
NOL or net loss carryforward, It said something in your slides that you are limited.
How much.
Is the NOL in Europe or is it in the United States or both or and how much can how much of an and all do you have to use going forward for.
Building cash.
I pass this question to.
Two batteries.
Michael.
Through that we have a good day still golf Nols there.
Made one side in France, and Spain and.
It will have on the league table amounted to be Youre seeing.
The U S. If this asset and your question.
Of course that he says certain limitations on the application of the Nols in terms of that.
<unk>.
And quantum.
But we feel confident that we can use and most often.
And you would use those is that something that you project might be used over the next five years or 10 years or so.
Over the next two yes.
Over the next two years, you would have all the NOL right and the bulk of it would be in 2022.
Okay.
For your debt reduction as a prohibited for you to call these and I guess its origin.
What's the.
What's the trigger for the board, calling in benign and three eighths.
Versus.
Okay.
You can't do open market purchases because the markets rallied in the bonds.
It is very difficult to hear you, but I would try to Atlanta with safran.
Two tranches of bonds the Super senior that we just recently.
Right.
Right and the reason why we did that is because we have the option to buy at Bard before October 2022.
The 975 seconds.
The trial until say.
Once it goes we thought.
Option, but we have the possibility to do open.
Reputation.
To repurchase any open market.
To a certain.
Set the limits of the filter.
Quantum of debt and this is what we have been doing and we will continue to do into blood to depending of course on the cash level and on the pricing.
To your question.
Yes. Thank you.
The legislation that president can assign I think today.
And there's.
Parts in there I think when you mentioned your.
Transaction that solar can.
Can you.
Could you describe how that may benefit.
You or does it benefit your end user and that.
To stimulate demand for more silicon in the United States.
Sorry, your question was around the new legislation.
And that certainly we certainly feel that it would be helpful. And then I think just to echo some of what.
Mark was alluding to you towards the end of the presentation. There is a number of different initiatives I think I guess at various stages.
And I think a lot of it does center around the.
The Mega trends that we've been.
Highlighting around energy transition, which is obviously solar a lot of the work that may help ultimately with E mobility and flows back into the work we're doing battery. So in general I think a lot of this legislation is promising for our customer base and end markets.
Okay. Thank you very much. Thank you for your patience, taking my questions.
Thank you and just in India.
We'll take one more participant please.
Thank you.
We will now take our final question.
Okay.
Please standby.
And your final question comes from the line of Michael Lang from <unk> Capital Management. Please go ahead. Your line is open.
Hey, guys good morning.
There is.
There have been following very recently called.
And no debt, which is developing very high percentage.
Silicon.
And nodes for lithium ion batteries.
The company has generated a tremendous amount of excitement because we've launched initial commercial products, mostly on smart watches.
Is that a customer.
Yourself in terms of your technology products.
Products.
<unk>.
As it relates to the second question is.
I don't know of anybody else sorry.
Your company given that you are the largest platform for China. Thank.
Developing these type of technology. So it can be so the two part question.
Are they a customer b.
Who else is doing what you are trying to do on <unk> Scott.
And why this is your territory you want to take.
So yes, we knew in Nordics and intermix is using a silicon re channel choosing.
Crystal aggressively A&P silicon so.
They are using.
Single mono Crystal.
Solar grade silicon so.
We are not.
Supplying them.
Within this being said the emergence of genomics is just reflective of the increased importance of silicon.
Yes, I know <expletive> will dose lithium ion batteries, and we can see an emerging and interesting trends and demands and.
And for Silicon in the in the battery suite.
And we're pretty confident that silicon.
Bill.
Very very good control as an energetic material in the in the Metro.
To answer your second question.
There's a lot of companies actually trying to put it in units.
Either it's a blend.
In the end nodes or even working.
Silicon rich.
I could I could give you.
A long list of names.
We are supplying some of them and we are.
Our rating with that is early.
The usage of Silicon, Indiana.
Our silicon carbine.
It can move channel is.
Is booming.
Uhm.
Oh no.
Second question would be.
Is there any other silicon metal materials companies like yourselves better supply type of silicon.
How is your competition in this kind of high technology area of Silicon metal.
This.
There's a limited number of.
Company able to deliver <unk> chronic silicon like we're doing.
So what we see in this limited number.
We will look to be restricted by change we see in the market.
All showroom.
Silicon suppliers.
Big market outside China, which are the U S and unit.
So or geographical.
Geographical footprint is clearly a massive advantage.
Blue carbon footprint is also a massive engines.
Okay. Okay. Thank you.
Right.
Yeah.
Thank you.
I will now hand, the call back tomorrow.
For final comments.
Thank you Sharon that concludes our second quarter earnings call once again.
We're excited about our record quarterly results. We have reported today, we are a company that is in its best condition since its formation.
And we have exciting prospects for the future.
Our goal is to continue to build on this success, we remain focused on growing our profitability and generating cash to help meet our goals. Thanks again for our your participation and support have a great day.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect speakers. Please standby.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Okay.
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