Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ferroglobe PLC (GSM, Financial) anticipates a strong adjusted EBITDA recovery in the second quarter, with continued momentum expected in Q3.
- The company is maintaining its full-year 2025 guidance, indicating confidence in future performance.
- Several regulatory trade measures are being introduced to curb low-priced imports, which are expected to stabilize the market and benefit Ferroglobe PLC (GSM).
- Ferroglobe PLC (GSM) successfully generated positive free cash flow in the first quarter despite challenging market conditions.
- The company increased its quarterly dividend by 8% and continued share repurchases, demonstrating a commitment to returning value to shareholders.
Negative Points
- Ferroglobe PLC (GSM) experienced a 27% drop in silicon metal volume, significantly impacting first-quarter results.
- The company reported a negative adjusted EBITDA of $27 million for the first quarter.
- Lower overall shipments and prices led to a 16% decline in revenue.
- Raw material costs increased as a percentage of sales, driven by lower fixed cost absorption and higher energy costs.
- The manganese segment faced challenges due to delays in receiving manganese ore, negatively impacting volumes.
Q & A Highlights
Q: Marco, you reiterated guidance even though Q1 is negative. How should we think about the cadence of improvement in Q2, Q3, and Q4 of 2025? Could you provide some color on volume, cost, and price?
A: Marco Levi, CEO: The negative results were expected and in line with our budget. We maintained our guidance of $100 to $170 million, accounting for various scenarios. We believe trade cases will balance the market, favoring local producers like Ferroglobe. We expect improvements in performance throughout the year, hence maintaining our guidance.
Q: Can you update us on the outlook for the Asian silicon market and where you've seen the most strength and weakness in Europe, the US, and Asia?
A: Marco Levi, CEO: Measures on imports from Southeast Asia are impacting exports, but countries like Indonesia and India may see increased business. Steel demand is expected to be flat, with India showing positive growth. In the US, aluminum demand is expected to improve due to incentivizing measures. Overall, we anticipate stable demand for our alloys business, with trade measures potentially boosting silicon metal demand.
Q: What would you need to see to increase shareholder returns, such as share repurchases?
A: Marco Levi, CEO: We are generating cash despite a challenging environment and expect to continue opportunistic repurchases based on available cash. Our priority is maintaining enough cash to run the company. We plan to spend a minimum of $50 million on CapEx this year, allowing for share repurchases as opportunities arise.
Q: Could you provide more details on your share repurchase strategy and its impact on shareholder value?
A: Beatriz GarcÃa-Cos Muntañola, CFO: We repurchased 720,000 shares in Q1 2025 at an average price of $3.75. From Q3 2024 to Q1 2025, we bought 1.3 million shares for $5.1 million. We assess our cash position and market forecasts to maximize long-term shareholder value. We aim to maintain a low leverage balance sheet and have increased dividends modestly.
Q: How do you plan to manage the company's financials given the current market conditions?
A: Beatriz GarcÃa-Cos Muntañola, CFO: Despite the challenging market, we generated $5 million of free cash flow, driven by a $25 million reduction in working capital and a $32 million energy rebate. We maintain a strong balance sheet, increased dividends, and continue share buybacks. Our focus is on operational efficiencies and maintaining a positive net cash position.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
