Q3 2024 Ferroglobe PLC Earnings Call
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Speaker Change: Ladies and gentlemen, this is the operator, thank you for standing by the Beach One conference call will begin momentarily until that time your lines will again be placed on music hold.
Speaker Change: So for your patients.
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Speaker Change: Also we're shifting to clean cost effective biochar Bob.
Speaker Change: Our so-called Citicorp glass two.
Speaker Change: <unk> achieved dose carabobo adaption goals.
Speaker Change: The new Biopharma production plant is expected to be operational by 2026.
Speaker Change: And found that the with substantial assistance from the Spanish government.
Speaker Change: In addition, we have made significant progress in sickle beta test of the BDC.
Speaker Change: I'm seeing the entire value chain from raw material to final products.
Speaker Change: Next slide please.
Speaker Change: Our third quarter revenue came in slightly lower than the second quarter due to lower volumes in all three segments.
Speaker Change: Despite the soft demand, we perform well improving our adjusted EBITDA to $60 million.
Speaker Change: Operating cash flow in the third quarter $11 million, an improvement of $9 million over the prior quarter.
Speaker Change: Yeah.
Speaker Change: Overall volumes were down 9% with all regions showing lower shipments.
Speaker Change: On a U S shipments were declined by <unk>, 9%, respectively.
Speaker Change: The silicon allows the location mixed.
Speaker Change: Okay, Mccullough and electronics markets are stable and the aluminium sector remains weak in both Europe and U S. In the short term.
Speaker Change: Okay.
Speaker Change: We believe the broader stimulus in the U S and China combined with interest rate cuts should begin to drive improved demand in the second of 2020.
Speaker Change: Next slide please.
Speaker Change: Let's move to silicon based alloys.
Speaker Change: This segment and an adjusted EBITDA of $2 million in Q3 now.
Speaker Change: Down from $10 million in the second.
Speaker Change: The decline was primarily due to lower fixed cost absorption.
Speaker Change: Average realized prices were flat compared to the prior year quarter in Europe, and North America.
Speaker Change: Europeans Paisley pharmaceuticals.
Speaker Change: Index is currently at the four year low.
and Maria Low.
Speaker Change: Reflecting lackluster demand savings and increased imports mainly from Asia.
reflecting lackluster demand and increased imports mainly from Central Asia.
Speaker Change: Please.
Speaker Change: These products have gained market share.
These products have gained market share due to predatory pricing.
Speaker Change: To put a doctorate pricey.
Speaker Change: Is there a level playing field, we continue to work on potential trade measures within view.
Speaker Change: To preserve a level playing field, we continue to work on potential trade measures within the EU.
Speaker Change: Both U S and they were beyond shipments volumes were down 1% in the third quarter.
Speaker Change: Both US and European shipments volumes were down 1% in the third quarter.
Speaker Change: As industrial activity remains muted.
as Industrial Activity Remains Muted.
Speaker Change: In its latest the warrants dealer Association report ESPN production grew 2% with the U S. Posting a one 2% growth in September.
Speaker Change: In its latest World Steel Association report, the U.S. Steel production grew 0.2%, with the U.S. posting a 1.2% growth in September.
Speaker Change: We expect the European market to be stable in the near term while the U S market is expected to benefit from favorable trade case, and the more robust economic outlook in 2025.
Speaker Change: We expect the European market to be stable in the near term, while the U.S. market is expected to benefit from a phasic trade case and a more robust economic outlook in 2025.
Speaker Change: Okay.
Speaker Change: Within the Silicon alloy segment, the foundry 13 years.
Within the silicon alloy segment, the foundry continues to outperform.
Speaker Change: Our platform.
Speaker Change: Next slide please.
Next slide, please.
Speaker Change: And last month to month that means otherwise revenue decreased 9% to $90 million in Q3, Devon or even by 24% decrease in their rps shipments due to soft demand.
Speaker Change: And let's move to manganese alloys. Revenue decreased 9% to $90 million in Q3, driven by a 24% decrease in European shipments due to soft demand.
Speaker Change: This was partially offset by substantial 16% price increase in the third quarter.
Speaker Change: This was partially offset by a substantial 16% price increase in the third quarter, resulting in adjusted EBITDA of $28 million, up 100% over the previous quarter.
Speaker Change: Resulting in adjusted EBITDA was $28 million.
Speaker Change: 100% over the prior year.
Speaker Change: After a significant turnaround following the shutdown of South 32, Genco bind the late March manganese ore prices have since dropped by approximately 60 per se.
Speaker Change: After a significant run-up following the shutdown of South32 chemical mine in late March, manganese ore prices have since dropped by approximately 60%.
Speaker Change: We continue to benefit in the third quarter as we sold our lower cost inventory Italia realized manganese alloy prices.
Speaker Change: We continue to benefit in the third quarter as we sold our lower cost inventory at higher realized manganese alloy prices.
Speaker Change: The underlying demand is still weak and is expected to continue for the fourth quarter and the first half of 2025. However.
Speaker Change: The underlying demand is still weak, and is expected to continue for the fourth quarter and the first half of 2025. However,
Speaker Change: We still anticipate spray to remain positive.
We still anticipate spraying to remain positive.
Speaker Change: Now I would like to turn the call over to Beth <unk>, Our Chief financial Officer to Randy of the financial results in more detail.
Speaker Change: Hey, Anthony.
Speaker Change: Thank you.
Speaker Change: Before I go through our third quarter results.
Speaker Change: It provides an update of the share repurchase program during the quarter with both chase approximately 117000 shares at an average price of $4.22.
Speaker Change: Mr. Ehrlich with our buyback program as a result of the company because of uncertainty in our end markets.
Speaker Change: As we begin to see signs of improvement and better visibility.
Speaker Change: Plans to become more proactive.
Speaker Change: Our first priority is ensuring that we maintain a strong balance sheet to make sure that nothing is well positioned to withstand the down cycle that we're currently experience.
Speaker Change: I also have the ability to invest in growth markets, such as solar and electric vehicles as these opportunities materialize.
Speaker Change: In addition to our discretionary buyback program was set up at 75, pilbara, allowing for Chase's turning a close window.
Speaker Change: Tdm unmet SME.
Speaker Change: As a reminder, we need $120 million to $150 million of cash.
Speaker Change: Cash to opening that what day two babies.
Speaker Change: In 2025 70.
Speaker Change: 75 million users SAPIEN, though in Spain.
Neal: Neal into payments when they first five deal in Q1 and the remainder in Q2.
Neal: Please turn now to slide 10 for a review of the income statement.
Speaker Change: Sales decreased 4% in the third quarter so.
Speaker Change: Uh huh.
Speaker Change: Also on the $34 million.
Speaker Change: You see we saw lower volumes across all three segments with a stronger silicon metal and manganese alloys prices.
Sandy: Sandy offsetting weak demand.
Sandy: So let me yes in energy consumption production remained flat, we thought Q till at 59% of sales.
Sandy: That makes me then by higher energy compensation incentives.
Sandy: Staff costs increased $5 million in the third quarter to $72 million.
Sandy: Literally due to profit sharing arrangement in Europe.
Sandy: Adjusted EBITDA in the third quarter was $60 million, that's a $58 million in the prior quarter.
Sandy: During the quarter, we earn approximately $20 million from our 2034, French NSE at Lima.
Sandy: We can't wait to increase our EBITDA by the same amount.
Sandy: So at least idling of our French operations, we now expect the benefit from the end of jazz Lehman by approximately $60 million on a year.
Sandy: Two our quiet estimate of approximately $40 million.
Speaker Change: Well the slide please.
Speaker Change: Oh, when adjusted the media was $60 million in the third quarter up five 5% sub Q2, driven.
Speaker Change: Natalie by a stronger realized prices.
Speaker Change: Silicon metal prices increase of 5% so the tire quotes and manganese alloys went up 16%, while silicon alloys split flat.
Speaker Change: So quite the pace spices benefit from highest index prices in the second quarter.
Speaker Change: To add two to three month lag between index and realized prices.
Sandy: Volume negatively impacted our adjusted EBITDA by $8 million.
Sandy: Driven by solid demand across our taking rents, which at waste volumes decline of 10 three.
Sandy: 3% and 21% and silicon method.
Sandy: Silicon based alloys, and manganese alloys, respectively.
Sandy: Head office and no called business negatively impact that impacted adjusted EBITDA.
Sandy: By $5 million as a result of lower volumes and our mining operations.
Sandy: Slide 12 please.
Speaker Change: Okay.
Speaker Change: During the third quarter, our free cash flow at Westwood.
Speaker Change: Yes.
Speaker Change: Impacted by use of cash by working capital of $21 million.
Speaker Change: This was partially offset by $11 million.
Speaker Change: Partial collection of the French energy rebate.
Speaker Change: Correct to collect another $20 million in the fourth quarter and the remaining $30 million in early 2015.
Speaker Change: Capex I'll close in the third quarter was $21 million.
Speaker Change: It was $22 million in the prior quarter.
Speaker Change: We paid 2.2.
Speaker Change: $2 $4 million or a 1.3 cent per share dividend on September 57.
Speaker Change: And I have scheduled to pay our fourth quarter dividend of one eight.
Speaker Change: <unk> per share on December 37.
Speaker Change: Next slide please.
Speaker Change: We ended the second quarter with a cash balance of $121 million.
Speaker Change: Down from $145 million.
Speaker Change: At the end of the second part.
Speaker Change: Our positive net cash position.
Speaker Change: Climbed from $64 million to $32 million you disappointed.
Speaker Change: Why our adjusted gross debt remained moderate ending at $89 million.
Speaker Change: As of September 30th.
Speaker Change: Next slide please.
Michael: At this time I'll turn the call back over to Michael.
Michael: Okay. Thank you Beth or it's moving to the key takeaways on slide 15.
Michael: We had another strong quarter, we are at an adjusted EBITDA of $60 million as our realized months on these other ROI in silicon metal prices improved over the cycle.