Q3 2024 Elkem ASA Earnings Call Transcript
Key Points
- Elkem ASA (ELKEF) reported its highest EBITDA since Q1 2023, reaching NOK1.2 billion, despite weak market conditions.
- The silicones division showed significant improvement, driven by higher sales volumes and operational enhancements.
- The new production line in China contributed positively with an EBITDA of NOK75 million in the quarter.
- Elkem ASA (ELKEF) successfully raised NOK1.5 billion in new bond loans to refinance maturing loans, improving liquidity and extending maturity profiles.
- The company received a platinum rating from EcoVadis and was rated in the 98th percentile by S&P Global, highlighting strong ESG performance.
- Market conditions remain challenging, particularly in China, with weak demand in construction and automotive sectors.
- The silicones market is under pressure due to overcapacity and weak economic activity, leading to uncertain price developments.
- Elkem ASA (ELKEF) faces high tax expenses, with a tax rate of 57% for the quarter.
- The company booked restructuring expenses of NOK54 million due to the closure of a smaller silicon facility in Germany.
- Cash flow from operations was low at NOK32 million, impacted by negative working capital changes and increased inventory levels.
Good morning. It's a pleasure, welcoming you to Elkem's third quarter results presentation. My name is Odd-Geir Lyngstad and I'm responsible for Investor Relations in Elkem. With me today, I have Helge Aasen, CEO and Morten Viga, CFO to take us through the business update, financial results for the third quarter and also the outbreak for the fourth quarter.
After Helge and Morten's presentations, we will open for Q&A. We will start with the business update. So please, Helge.
Thank you, Odd-Geir and welcome everyone. The EBITDA for in the third quarter is the highest since the first quarter of 2023. And profitability has gradually been improved. And that is despite the weak market conditions which are continuing, the operating income for the group was NOK8 billion in the quarter and the EBITDA ended up at NOK1.2 billion. So this gives an EBITDA margin of 15% which is within our target corridor 15% to 20%.
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