Q4 2024 Ferroglobe PLC Earnings Call
Thank you for tuning in to The SHEBA Channel
[music].
Speaker Change: Good morning, ladies and gentlemen, and welcome to the third late fourth quarter and full year, 'twenty, 'twenty, four and adding scope.
Speaker Change: 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 may be recorded I would now like to turn the call over to Alex are too and I'm very glad Vice President of Investor Relations you may begin.
Speaker Change: Thanks, Tania and good morning, everyone and thank you for joining <unk> fourth quarter and full year 2024 conference call. Joining me today are mark where they.
Speaker Change: Our Chief Executive Officer, and batteries Garcia, Pos our Chief Financial Officer.
Speaker Change: Before we get started with our prepared remarks I'm going to read a brief statement. Please turn to slide two at this time.
Speaker Change: Statements made by management. During this conference call that are forward looking are based on current expectations factors that could cause actual results to differ materially from these forward looking statements can be found in cargo ups. Most recent SEC filings and the exhibits to those filings which are there.
Speaker Change: <unk> on our webpage as terrible dotcom.
Speaker Change: Okay.
Speaker Change: In addition, this discussion includes references to EBITDA.
Speaker Change: Adjusted EBIT.
Speaker Change: Adjusted gross debt.
Speaker Change: Adjusted net debt and adjusted diluted earnings per share among other non <unk> measures.
Speaker Change: Reconciliations of these non <unk> measures maybe found in our most recent SEC filings.
Speaker Change: I turn the call over to Martin <unk>, our CEO I want to announce that we'll be participating in the BMO global market metals mining and critical minerals conference in Florida on February 24th and 25th.
Speaker Change: We hope to see you there.
Speaker Change: Marco.
Speaker Change: Thank you Alex Thanks for joining us on the call today, we appreciate your interest in Ferro Globe.
Speaker Change: Before I provide a recap of our 2020 for accomplishment I want to thank all of our global employees for a successful year.
Speaker Change: We posted revenue of $1 $6 billion, and adjusted EBITDA of $154 million.
And free cash flow of $164 million.
Speaker Change: We used our strong cash flow generation to repay the remaining senior secured notes.
Speaker Change: These notes.
Speaker Change: <unk> us $32 million in annual interest.
Speaker Change: And in the first quarter of 2024, we became net cash positive for the first time in <unk> history.
Speaker Change: History, and maintain our strong balance sheet throughout the year.
Speaker Change: The strong balance sheet.
Speaker Change: <unk> enables us to initiate our capital return program, consisting of quarterly dividends and share buybacks.
Speaker Change: We paid.
Speaker Change: Our initial dividend in the first quarter of 2024.
Speaker Change: And our increasing <unk> by approximately 8% in the first quarter of 2025.
Speaker Change: In addition.
Speaker Change: We began our share repurchase program in the third quarter.
Speaker Change: We will continue to execute selectively in 2025.
Speaker Change: We also intend to continue complementing our discretionary repurchases.
Speaker Change: Can be five one plan.
Speaker Change: While our share buybacks have been modest we intend to get more aggressive as we gain visibility and see improvement in our end markets maintaining a strong balance sheet to ensure that we have the ability to navigate any downturn is our top priority.
Speaker Change: One of the most important developments taking place.
Speaker Change: It's changing global trade, including potential antidumping, and countervailing duties tariffs and safeguards.
Speaker Change: This creates uncertainty until they become better defined.
It is clear that governments are taking these measures seriously.
Speaker Change: And this heighten focus is likely to make types and safeguards more prevalent going forward.
Speaker Change: Some actions have already taken place and some are under consideration.
Speaker Change: These trade measures enacted by governments.
Speaker Change: Expected to benefit domestic producers.
Speaker Change: The trade flows are altered across the globe.
Speaker Change: As the largest western producer with significant local operations, which are back integrated in North America and Europe.
Speaker Change: We have historically been significantly impacted by an uneven playing field.
Speaker Change: Equally importantly, we serve customers who buy mostly lockup.
Speaker Change: With the recent government announcements in North America and in Europe.
Speaker Change: Within the European community.
Speaker Change: We are optimistic that these actions will positively impact our markets in the coming quarters, providing a tailwind for our business and driving future growth.
Speaker Change: What the trade uncertainty is difficult to handicap. We believe these measures are imperative and will transform our industry for the better.
Speaker Change: In the U S.
Speaker Change: National Lottery Commission that Herman that Russia, Malaysia, Kazakhstan, and Brazil, unfairly priced ferrous silicon adversely impacting local producer.
Speaker Change: As a result combine antidumping and countervailing duties of more than 1000.
Speaker Change: Percent were placed on Russia.
Speaker Change: Final anti dumping and countervailing duties against Malaysia, Kazakhstan and Brazil.
Speaker Change: It will be announced by the department of Commerce on March 21st.
Speaker Change: Combined these four countries in 2023 imported approximately 140000 tons of ferrous silicon into the U S accounting for approximately 65% of the market share.
Speaker Change: Overall these measures are expected to benefit us significantly going forward.
Speaker Change: Yes.
Speaker Change: The European market. It's also been matched by low priced imports, particularly from eastern countries.
Speaker Change: In December 2020 for European Commission initiated a safeguard investigation into silicon metal silicon based alloys and manganese alloy imports.
Speaker Change: While the potential magnitude of these measures is yet to be determined we expect the provisional decision in Q2 with a final determination anticipated in Q4.
Speaker Change: To put things into perspective.
Speaker Change: Total consumption of silicon metal silicon alloys, and manganese alloys declined approximately 12% or 300000.
Speaker Change: Between 2019 and 2024.
Speaker Change: Combined with an estimated 7% point increase in the market share of imports from eastern countries. This is a material impact on European markets, which is reflected in price.
Speaker Change: Total import total imports have increased by 70000 tons since 2019 accounting for 40% market share.
Speaker Change: As the largest domestic European producers. This measures if enacted are expected to positively impact the quality of the business and provide fair global is a great opportunity to increase our market share.
Speaker Change: Moving to current market conditions. It has been a challenging environment in Europe, and North America in the recent months.
Speaker Change: While we expect market conditions to persist through the first half of 2025.
Speaker Change: We're beginning to see signs of market bottom as indexes have stabilized and prices for phase III silicon in Europe in manganese alloys are trending.
Speaker Change: One key factor contributing to our more optimistic outlook is the consistent growth of <unk> production over the past several months.
Speaker Change: There was still association Forex has continued growth of three 5% in 2025 with North American steel production is expected to grow at a rate of one 6% in 2025.
In addition, the.
Speaker Change: Safeguard measure in 2019 is currently under review and the aluminum industry as a requested a safeguard investigation into imports.
Speaker Change: A positive decision would encourage more steel and aluminum production in the EU further ramping demand for all our products.
Speaker Change: Another encouraging sign is the improved manufacturing PMI.
Speaker Change: In January global PMI posted its highest level in seven months with the U S increasing to $51 two representing solid growth boosted by a 34 months in the expected production outlook.
Speaker Change: In addition, Europe squared contraction is expected to show improvement in the coming months.
Speaker Change: Next.
Speaker Change: I will discuss the outlook for 2025.
Speaker Change: On our last call I mentioned sales and operation planning are simply SLP as another total drive incremental improvement across all phases of our book.
We are in the are leaning service implementation, but I've already seen benefits, we will reduce working capital in the.
Speaker Change: Quarter.
Speaker Change: Once implemented across all our businesses, we expect to see material operation efficiency with improved cash flow.
Speaker Change: Working capital and cost benefits.
Speaker Change: For a brief update on core shale.
Speaker Change: We continue to see promising test results from this partnership.
Speaker Change: As a result, we recently increased our investment.
Speaker Change: We look forward to continued collaboration as we drive innovation with this exciting technology.
Speaker Change: We are bullish about silicon metal overall as it is.
Speaker Change: <unk>.
Breakthrough in EV batteries, and as a leader in silicon metal, we are well positioned to capitalize on the industry shift from graphite to silicone reach arnotts.
Speaker Change: <unk> batteries.
Speaker Change: This will significantly enhance the performance of <unk>, including lower cost longer ranges and shorter charging times.
Speaker Change: Next.
Speaker Change: I will provide a brief update.
Speaker Change: Data on 2025 guidance.
Speaker Change: We are initiating adjusted EBITDA guidance of $100 million to $170 million. The wider range of guidance is a result of uncertainty related to market conditions timing of trade cases potential tariffs and geopolitical issues.
Bellatrix: Bellatrix will walk you through.
Bellatrix: Our main assumptions related to guidance next slide please.
Bellatrix: Our fourth quarter revenue decline compared to the third quarter due to lower volumes across all three segments.
Bellatrix: Adjusted EBITDA was $10 million down from $60 million.
Bellatrix: Impacted by lower prices higher costs and softer volumes.
Bellatrix: Operating cash flow improved by $21 million, reaching $32 million in the fourth quarter free cash flow increased to $14 million, an improvement of $24 million over the prior year quarter.
Bellatrix: Next slide please.
Bellatrix: Let's talk about silicon metal.
Bellatrix: Silicon metal revenue declined 17% in Q4 to $161 million.
Bellatrix: Down from $194 million in the third quarter.
Bellatrix: Adjusted EBITDA declined to $17 million in the fourth quarter due to higher costs lower prices and reduced volumes.
Bellatrix: Our realized prices declined 5% over the previous quarter during the fourth quarter index prices decreased approximately 16% in the U S.
Bellatrix: While the European Index was unchanged.
Bellatrix: Overall volumes were down 12% with all regions reporting lower shipments.
Bellatrix: European and U S shipments declined 13% and 30% respectively.
Bellatrix: The outlook for silicon metal continues to be soft.
Bellatrix: The aluminum sector in Europe, and U S is expected to remain flat in the short term.
Bellatrix: Yes, the level of imports is impacting the north American and European regions. In addition, uncertainty related to potential U S. Tariffs have resulted in some of our select customers postponing purchasing decisions.
Bellatrix: Despite these short term issues, we anticipate that the silicon market will improve.
Bellatrix: The de stocking cycle is completed which we expect to take a few months as a result, we are optimistic that demand will pick up in the second half of 2025.
Bellatrix: Next slide please.
Bellatrix: Our silicon based alloys segment, adjusted EBITDA improved slightly to $3 million in Q4, primarily driven by cost improvement.
Bellatrix: Average realized prices declined by 3% over the third quarter.
Bellatrix: Volumes were pressured by low demand and aggressively priced imports.
Bellatrix: Especially in Europe.
Bellatrix: We our shipments declined by 25% in the fourth quarter.
Bellatrix: The European Phase three standard index was down 7%.
Bellatrix: While the U S index was down 6%.
Looking ahead, we are encouraged by the recent 5% increase in European Index price since the end of 2024.
Bellatrix: With the various trade measures and forecasted growth in steel production.
Bellatrix: We expect the market prices to improve in both Europe and U S. As the year progresses.
Bellatrix: Turning now to manganese alloys next slide please.
Bellatrix: Revenue declined 13% to $78 million in Q4.
Bellatrix: Driven by a 17% decrease in prices.
Bellatrix: Partially offset by a 5% increase in shipments.
Bellatrix: Adjusted EBITDA decreased $9 million, primarily driven by tighter spreads and the impact of working through higher cost manganese ore inventory.
Bellatrix: The recent tightening of manganese ore supplies boosting prices, which are three four months.
Bellatrix: We are optimistic about the manganese segment outlook for 2025 supported by improvements in pricing and spreads.
Bellatrix: The recent uptick in demand isn't core encouraging and we'd expect that trend to continue in the coming quarters.
Bellatrix: I would now like to turn the call over to Beth <unk> cost our CFO to review the financial results and guidance in more detail.
Bellatrix: Yes.
Beth: Thank you Marcos.
Beth: Please turn to slide 10 for a review of the income statement.
Beth: Thanks decreased 18 eight.
Beth: 18% sequentially.
Beth: In the fourth quarter to $668 million.
Beth: Driven by a 13% decrease in volumes for both silicon metal and silicon alloys.
Beth: Lower prices in those segments.
Beth: <unk>, 4% for silicon alone to 17% for manganese alloys.
Beth: Manganese alloys volumes grew 5% quarter over quarter.
Beth: For the full year.
Beth: <unk> was flat versus 2013 with growth in the manganese alloy segment offsetting declines in ferrosilicon sales.
Beth: Better sales.
Beth: Rapid slightly for the full year.
Beth: In the fourth quarter raw material and energy consumption for production.
Beth: Close to 69% of sales.
Beth: 58% in the prior quarter.
Beth: Driven by lower production higher energy cost and increased manganese ore prices for.
Beth: For the full year.
Beth: <unk> okay.
Beth: This points to 62% of sales at lower prices and higher energy cost defense ADESA.
Beth: Adjusted EBITDA in the fourth quarter.
Beth: $10 million.
Beth: Down from $60 million in the prior quarter.
Beth: Full year 2024, adjusted EBITDA was $154 million.
Beth: Compared to $315 million.
Beth: Okay.
Beth: Attributable mainly to higher energy costs.
Beth: In France, and lower realized prices.
Beth: Next slide please.
Beth: Approximately 60% of the REIT the decline is attributable to lower pricing with realized prices down.
Beth: C 17.
Beth: Percent silicon metal.
Beth: Silicon based alloys, and manganese alloys, respectively.
Beth: Lower index prices in the third quarter.
Beth: Any impact there.
Beth: Fourth quarter sales prices.
Beth: To add to the team on Lac DT indexes and realized prices.
Beth: Cost increases primarily due to higher energy costs.
Beth: The new fans and elevated manganese cell cost reduced our EBITDA by approximately $11 million.
Beth: Lower volumes impacted our adjusted EBITDA by $3 million.
Beth: Mainly due to soft demand for silicon metal and silicon based alloys.
Beth: Which experienced volume declines of 12% and 13% respectively. This was partially offset by a 5% increase in volumes in the manganese alloy segment.
Beth: Head office, and non core business reduced 4% adjusted EBITDA by $6 million.
Beth: Slide 12 please.
Beth: Adjusted EBITDA for the full year was $154 million versus $615 million in 2023, and EBITDA margin was 9% down from 19% in 2033.
Beth: While it sounds like volumes contributed $79 million to adjusted EBITDA of ethylene prices have the biggest impact on our 2054 adjusted EBITDA the DSA in bi.
Beth: Similarly $128 million.
Beth: Higher costs impacted EBITDA for the year by $83 million, mostly related to higher energy expenses in euros.
Beth: Hey, Duffy said local basis continue to 2024 adjusted EBITDA driven.
Beth: By lower head office related costs and improved mining operations.
Beth: Next slide please.
Beth: During the fourth quarter with recognized a $61 million non cash impairment and goodwill write off related to our operations. Our operating cash flow was $32 million benefit from a $23 million release of working capital our.
Beth: Decision to either in our French operations earlier, combined with effective energy management.
Beth: Altered in a negative rebate of $21 million in the fourth quarter.
Beth: <unk> $34 million.
Beth: Collected in January 2025.
Beth: Capex in the fourth quarter was $18 million down from $21 million in the third quarter for.
For the full year, we generated $243 million of operating cash flow.
Beth: $79 million in Capex.
Beth: Something in $164 million.
Beth: Free cash flow.
Beth: We used $160 million of this cash flow to redeem the remaining senior secured notes.
Beth: We paid.
Beth: $4 million.
Beth: One.
<unk> per share.
Beth: Dividend on December 27, we are declining the first quarter 2035 dividend of $1.04 per share representing an 8% increase the dividend will be paid on February 26 for shareholders on record on February 20.
Beth: Next slide please.
Beth: Okay.
Beth: We ended the fourth quarter with a cash balance of $133 million up from $121 million at the end of the third quarter.
Beth: Our positive net cash position improve it.
Beth: 59 $179 million survey.
Over $32 million in the prior quarter.
Beth: While our adjusted gross debt increased slightly ending the quarter at $94 million as of December 31st.
Beth: Before I turn the call over to Michael I wanted to provide some more insight related to our 2025 outlook.
Michael: We are targeting a working capital improvement of $58 million in 2025, as we continue the implementation of the <unk> process. We expect our 2035 capex to be in the range of $60 million to $65 million.
Beth: Our cash tax rate to be around 24%.
Beth: Our standing spinal sappy loan with a principal balance of $36 million is due in 2035.
Beth: First principal payment of $90 million is due in March with the remaining $17 million deal in June.
Beth: As Michael mentioned earlier, we anticipate our 2025 adjusted EBITDA.
Michael: Between 101 hundred $70 million for.
Michael: For the first quarter, we expect our adjusted EBITDA to be negative due to the impact of low prices weak demand and idling operations in France. This is consistent with our budget.
Michael: Our 2025 outlook reflects a partial benefit from take measures and unexpected improvement in market conditions during the second quarter. Thank you.
Michael: Next slide please at this time I will turn the call back to Michael. Thank you Beth is moving to the key takeaways on slide 16.
Michael: Favorable by the successful 2024, despite unfavorable market conditions, we posted solid adjusted EBITDA.
Speaker Change: We strengthened our balance sheet significantly initiated quarterly dividend and the share buyback program, while focusing on innovation and advanced silicon metal is critical materials for the energy transition.
Michael: As evidence of the changing global trade environment.
Michael: U S Trade Commission and European Commission initiated broad trade measures.
Michael: To level, the playing field against predatory trade practices.
Michael: We expect to capitalize from these measures in the second half of this year.
Michael: There are early signs that the demand environment some might be bottoming.
<unk> revenues and favorable price in Europe.
Michael: Ticked up in recent weeks, we foresee broader improvement in the second half of 2025.
Michael: Fair Globe has positioned the company for long term success by making strides in developing advanced users for silicon <unk>.
Michael: Including the partnership with Porsche.
Michael: And implementing ethanol P tools to increase efficiency and lower working capital.
Michael: Operator, we're ready for questions.
Speaker Change: Thank you Joe.
Speaker Change: Ask a question during this session you will need to press star one one on your telephone keypad. You will then hand automated message advising Johan does rates. Please.
Speaker Change: The name to be announced to withdraw your question. Please press star one again.
Speaker Change: We will now take our first question please standby.
Speaker Change: And the first question comes from Nick Giles from B Riley Securities. Please go ahead. Your line is now open.
Nick Giles: Thank you very much operator, and good morning, or good afternoon, everyone.
Nick Giles: I wanted to start with your annual guidance. This is a wider range. So I was hoping you could give us a sense for what.
Nick Giles: What's baked into the lower end versus the higher end, specifically as it relates to pricing and volume and then how much of.
Nick Giles: The high end could be determined by implicate implications of trade measures versus improved demand. Thanks very much.
Nick Giles: Thank you let me start answering this question.
Nick Giles: By coincidence, we gave the same guidance of last year.
Nick Giles: The point is.
Nick Giles: We are facing an even more volatile.
Nick Giles: Environment.
Nick Giles: Not at all in terms of demand, but in terms of uncertainty on the trade measures.
Nick Giles: That are going to be.
Nick Giles: Set by the authorities both in U S.
In Europe.
Nick Giles: So.
Nick Giles: Let's say that.
Nick Giles: First quarter <unk> medicine.
Nick Giles: There's going to be particularly tough because we start from very low prices and extremely low volumes.
Nick Giles: And the usual.
Nick Giles: Opportunity issue of having our French plant down in the first quarter guide.
Nick Giles: So.
Nick Giles: And then as the second quarter, we see.
Nick Giles: The environment improvement with some decisions should be taken in the U S.
Nick Giles: Yes.
Nick Giles: And the third quarter I think both both geographic areas are going to be impacted by this.
Nick Giles: So.
Nick Giles: If you look at the low side of the guidance.
Nick Giles: Is that sort of conservative forecast.
Nick Giles: Based on today's situation. The IRS is based on like we say all.
Nick Giles: A power shuttle.
Nick Giles: Success.
Nick Giles: Of the governments to impose to impose duties.
Nick Giles: And we have estimated.
Nick Giles: Prices and volumes.
Nick Giles: Live tour.
Nick Giles: The range that we have mentioned one $170 million.
Nick Giles: Okay.
Speaker Change: Thank you very much marker that's helpful. Maybe just to follow up on that would there be.
Speaker Change: Any sort of sensitivity that you may be able to provide in terms of.
Speaker Change: Volumes or pricing, maybe anchoring near the near the mid point.
Speaker Change: Yes, Hi, this is mutation speaking maybe.
Speaker Change: Maybe I thought it'd be shedding data point that I think you have already had blood bank go through so for every 1% of variance in pricing more or less.
Speaker Change: Positively our EBITDA by $14 million. This is the number that you have to.
Speaker Change: So keep in your mind, if this makes sense.
Speaker Change: Yeah.
Speaker Change: Got it that's very helpful.
Speaker Change: I really appreciate that.
Speaker Change: Maybe my next question.
Speaker Change: Mark I was wondering if you could speak to some of the key growth markets in silicon metal in the context of your desire for further expansion.
Speaker Change: Solar markets two appears somewhat softer so curious if this changes your appetite for expansion or or potential timing.
Speaker Change: And.
Speaker Change: Alongside this if you'd have any updates as it relates to the brownfield expansion.
Speaker Change: Okay.
Speaker Change: Just two.
Speaker Change: Just to try to say for clothes.
Speaker Change: We firmly believe.
Speaker Change: Silicon penetrating.
Speaker Change: <unk> more substantially.
Speaker Change: Our <unk> business.
Speaker Change: And.
Speaker Change: There are existing technologies, but also new technologies under development.
Speaker Change: More.
Speaker Change: The graphite or replacement from a 5% to even 100%.
Speaker Change: Fighter replacement.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: And we are working with several companies of course, we have announced our cooperation with core share, but we work with a number of players, particularly in the U S.
Speaker Change: And I think that there.
Speaker Change: The level of progress is amazing issues.
Speaker Change: Next time before a new technology is adopted.
Speaker Change: In batteries.
Speaker Change: So we firmly believe in that and we are totally committed to that.
Speaker Change: Can you talk about.
The solar business.
Speaker Change: While our current business existing business is mainly impacted by <unk>.
Speaker Change: Scott.
Speaker Change: Capacity of polysilicon.
Speaker Change: China.
Speaker Change: And.
Speaker Change: For our business is impacted by the current investigation on the imports on solar cells and modules.
Speaker Change: In the U S.
Speaker Change: Yes.
Speaker Change: <unk> is.
Speaker Change: It is expected to be concluded sometime in April this year based on what we know.
Speaker Change: This will shorten should yield.
Speaker Change: Our sales opportunity.
Speaker Change: In Asia are talking in terms of clearly the overcapacity of polysilicon has closed.
Speaker Change: Crash of the price of polysilicon I think mostly.
Speaker Change: Below cost for most of the players.
Speaker Change: And this has been slowing down.
Speaker Change: The polysilicon projects new policy come projects outside of China. So there is a time factor.
Speaker Change: I think that.
Speaker Change: Sure.
Speaker Change: At least Europe is still quiet in terms of setting setting of solar supply chain. The same for other cancers in the middle East.
Speaker Change: In U S.
Speaker Change: For sure there is going to be more protection on sales.
Speaker Change: And modules.
Speaker Change: So we expect the overall demand of silicon metal benefit to benefit out of these two items.
Speaker Change: Talking about the U S expansion, we are working on.
Speaker Change: Submission for paper for the permit.
Speaker Change: And so.
Speaker Change: It's always a question of a few months.
Speaker Change: And then we expect to get that Theyre, making a timeframe.
Speaker Change: <unk>.
Speaker Change: Since we started the process.
Speaker Change: And then it will take about a couple of years.
Speaker Change: To build that plant.
Speaker Change: Yes.
Speaker Change: The project is growing is growing.
Speaker Change: As aggressively as we can.
Speaker Change: And we're going to make it.
Speaker Change: Okay.
Speaker Change: Mark.
Speaker Change: Really appreciate all the color there.
Speaker Change: One more if I if I could.
Speaker Change: It's good to see some initial share repurchases.
Speaker Change: You are waiting for more certainty in the market, but how should we think about magnitude of potential buybacks. If markets were to turn is there a.
Speaker Change: Is there a minimum cash balance in mind that would imply potential cash that could be set aside for capital returns I know Baytree's, you mentioned working capital release of $50 million, if I heard you correctly.
Jamie: Okay well. Thank you for the question Mark This is Jamie speaking so Jeff.
Jamie: To recap we bought in 2024.
Jamie: 606.
Jamie: Alison.
Jamie: Sure.
Jamie: And up to now we have been continue on on Q1 to buy some shares right.
Jamie: <unk>.
Jamie: We continue will tend to continue the opportunistic approach to the share buyback.
Jamie: And as we have been commenting on the <unk> core.
Jamie: Core technique.
Jamie: We don't plan to take additional debt to support the share buyback.
Jamie: Right.
Jamie: No.
Jamie: And on the other side, you know more or less what is our liquidity.
Speaker Change: <unk> for the company.
Speaker Change: We always go through an opportunistic approach to the share buyback. So hopefully you see it equity needs working capital et cetera et cetera.
Speaker Change: We can do a little bit more.
Speaker Change: Thanks, guys I really appreciate that.
Speaker Change: Yes.
Speaker Change: Do you and the team continued best of luck keep up the good work.
Speaker Change: Thank you so much.
Speaker Change: Thank you we will now go to our next question. Please standby.
Speaker Change: And the next question comes from Martin Englert from Seaport Research Partners. Please go ahead. Your line is now open.
Martin Englert: Hello, Good day, everyone.
Martin Englert: Just circling back to the annual guidance, yes.
Martin Englert: <unk> prices for Silicon alloys remain unchanged from current levels do you still achieved $100 million guidance range.
Martin Englert: We do expect that because there is also.
Martin Englert: I was also a question Mark.
Martin Englert: I'll make thrive.
Martin Englert: The first quarter.
Martin Englert: Particularly impacted not only by.
Martin Englert: Okay.
Martin Englert: Demand and low pricing, but also by the fact that allow our French plants are down.
Martin Englert: And the other factor is that we expect to.
Martin Englert: To recover some business in the second half of the year, which is not there today, which is our business.
Martin Englert: So it's a question of mix.
Martin Englert: But anyway, even in keeping the current condition. So we.
Martin Englert: We expect to achieve at least the bottom of the range that I have mentioned.
Martin Englert: And I would add that the volume is also a factor.
Martin Englert: Yes.
Martin Englert: What is factored in as far as volumes.
Martin Englert: Or a range for the full year with 100 million to $170 million across your business units.
Martin Englert: While we are talking about more revenue.
Martin Englert: Very much aligned to 2034.
Martin Englert: Okay.
Martin Englert: <unk>.
Martin Englert: Can you walk me through the contribution.
Martin Englert: Although the quarterly French energy credit for 2024, just going through <unk> through <unk>. I believe you said earlier was $21 million for <unk> and what is targeted for 2025.
Michael: Hi, Michael.
Speaker Change: Anticipating hill.
Michael: Uh huh.
From 2033, 2%.
Michael: The compensation has been a little bit low extra total for the year is $60 million.
Michael: $61 million in the Q4 the impact the P&L impact is $24 million right and from a cash perspective, we've got already in 2000 had been deferred.
Michael: $32 million out of the fixed fee.
Michael: And the growth.
Michael: Hi.
Michael: Okay.
Michael: As I said before.
Michael: Okay.
Speaker Change: What are you factoring into the guidance for the credit for 2025.
Michael: While this is lower.
Speaker Change: 2024.
Speaker Change: I think the good news here is that we are negotiating the contract for 2020, starting first of January 2036.
Speaker Change: And we expect to get there.
Speaker Change: A very good contract.
Speaker Change: Alright, Thank you very much good luck.
Martin Englert: Thank you Martin.
Speaker Change: Thank you.
Martin Englert: We'll now go to our next question please standby.
Speaker Change: And the next question comes from Kyle Mallory from Grizzly Rock capital. Please go ahead. Your line is now open.
Good day and thank you for taking my question. So if the European quota system.
Speaker Change: Is finalized as proposed.
Speaker Change: Our European production volumes should increase the.
Speaker Change: The question is as the euros utilization level increases how would this impact cost per ton of European production.
Speaker Change: Yes.
Speaker Change: You mean for <unk>.
Speaker Change: Tom.
Speaker Change: Impact.
Is this your question.
Speaker Change: The question is production cost per ton in Europe.
Speaker Change: Okay.
Speaker Change: Well.
Speaker Change: Yeah.
Speaker Change: Let me say that we don't know.
Speaker Change: Which measures.
Speaker Change: <unk> is gone.
Speaker Change: Adopted.
Speaker Change: And if they get approved by the 27 countries right.
Speaker Change: So we are in the process, we are answering a lot of questions.
Speaker Change: That come from.
Speaker Change: Suppliers country state.
Speaker Change: As in the document.
Speaker Change: Great.
Speaker Change: We are in this phase so I cannot anticipate.
Speaker Change: What EU is gone.
Speaker Change: But they mentioned safeguards in their announcement on December 19, and.
Speaker Change: Currency usually.
Speaker Change: Quarters.
Four commentaries and specific per user commentaries.
Speaker Change: Back to a certain year.
Speaker Change: And.
Speaker Change: And as a consequence.
Speaker Change: Part of the demand is it cannot be freed up.
Speaker Change: For the European suppliers.
Speaker Change: I remind you that.
Speaker Change: It is.
Speaker Change: <unk> already decided for critical materials like the ones that we have in our portfolio.
Speaker Change: They want to add.
Speaker Change: The back integration of 40%.
Speaker Change: And today.
The market share of the EU producers is far below this level.
Speaker Change: 14, 15% probably worse in first quarter.
Speaker Change: So there is going to be impact on volume.
Speaker Change: Capacity utilization now.
Speaker Change: Factoring at this stage.
Speaker Change: How fast this this demand is gone.
Speaker Change: If it got economy to ask Barry.
Difficult.
Speaker Change: And.
Speaker Change: Also because in the meantime is not clear if they are going to be.
Speaker Change: Some.
Speaker Change: Retroactive measures.
Speaker Change: Imposed.
Speaker Change: To the different import tariffs.
Speaker Change: Outside of the U I am sorry for not being precise.
Speaker Change: But yet your.
Speaker Change: I assume that our capacity utilization in the succumb to off of the year in Europe will go up.
Speaker Change: And will go up.
Speaker Change: Hey, good morning.
Speaker Change: Much better cost absorption at all our plants.
Speaker Change: Yes.
Speaker Change: Thank you for the response.
Speaker Change: In terms of the United States with ferrous Silicon rulings have you started to see the reduced imports flowing through now and then how should we think about the cadence of pricing through 'twenty for us.
Speaker Change: Yeah, well first.
Speaker Change: Are all if you look at the <unk>.
Speaker Change: Statistics of 2024.
Speaker Change: There is expected.
Speaker Change: The Atlantic Alright adoption of imports from from Russia on the other side there was a lot of inventory in Europe. So for us our materials based on our knowledge and understanding.
Speaker Change: Which has impacted the overall pricing of phase <unk>.
Speaker Change: Now Tracy price.
Speaker Change: Yeah.
Speaker Change: Decisions on.
Speaker Change: <unk>.
Speaker Change: Packaged.
Speaker Change: Asia and Brazil are pending.
Speaker Change: Michelle Department in that respect.
Speaker Change: On <unk>.
Speaker Change: March 21st issue here.
Speaker Change: And when you put this the importance of these three countries together in 2023 to equalize to one third of the market. So there is uncertainty on this volumes what is clear we couldn't get the statistics is that in the last in September.
Speaker Change: The volumes of <unk>.
Speaker Change: Q seven.
Speaker Change: In particular.
Speaker Change: And Malaysia as well have gone.
Speaker Change: Down almost to zero.
Speaker Change: So this is why we think of that.
Speaker Change: If you combine that can be.
Speaker Change: The weak steel.
Speaker Change: Production in the last months of the year in the U S.
Speaker Change: We think that inventories are getting depleted.
Speaker Change: Sure.
Speaker Change: Pretty quickly so we should see an impact on currency weakened demand.
Speaker Change: Yeah.
Speaker Change: Our demand for final silicone Mus talking about Paragon is going up.
Speaker Change: We have signed two new contracts.
Speaker Change: Yes.
Speaker Change: Customers.
Speaker Change: We're not used to buy for CV Contra months. So this is another another good sign.
Speaker Change: Okay.
Speaker Change: That's good.
Speaker Change: Good to hear last question from me just since it came up on the potential new the United States.
Speaker Change: <unk>.
Speaker Change: Sort of.
Speaker Change: Rate of return would you want us to go forward with that investment.
Speaker Change: Is it a per ton.
Speaker Change: Type of <unk>.
Speaker Change: <unk> approach on pricing I know you had talked about.
Speaker Change: Longer term volume contracts, but what sort of returns should shareholders expect.
Speaker Change: To choose to go forward with that investment yes.
Speaker Change: In fact, a much higher return than.
Speaker Change: Any previous this investment that we have maintained silicon metal.
Speaker Change: And there is.
Speaker Change: We think that we have the capabilities to build the most powerful and kind of a soft performance marked in terms of energy consumption.
Speaker Change: The most powerful.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Fair enough.
Speaker Change: Bill in terms of.
Speaker Change: Vessel size vessels energy consumption.
Speaker Change: For sure we're going to expect a return which is an hour.
Speaker Change: Then our.
Speaker Change: Can our cost of capital.
Speaker Change: Okay. Thank you very much.
Speaker Change: Thank you.
Speaker Change: Key to time constraints, we will not be taking any further questions and I would now like to hand back to Marco Levi for any closing remarks.
Thank you.
Speaker Change: Want to advertise for Globus.
Speaker Change: And that's in being able to navigate successfully through this uncertain market environment.
Speaker Change: While at the same time, strengthening our balance sheet and positioning the company for growth.
Speaker Change: Thank you for your participation we look forward to hearing from you on our Mexico have a great day.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].