Ferroglobe Reports Results for Second Quarter of 2018
Ferroglobe Reports Results for Second Quarter of 2018
Sales of
- Sales of
$583.0 million , an increase of 4.0% from$560.7 million in Q1 2018 - Net profit of
$66.0 million , or$0.39 on a fully diluted per share basis, a 85.4% increase from a net profit of$35.6 million , or $0.21 per share, in the prior quarter. Adjusted net profit of$25.7 million , or$0.14 on a fully diluted per share basis, a 22.9% decrease compared to adjusted net profit of$33.3 million , or$0.19 on a fully diluted per share basis, in the prior quarter - Reported EBITDA of
$130.9 million , an increase of 40.0% compared to reported EBITDA of$93.5 million in Q1 2018 - Adjusted EBITDA of
$86.3 million , a decrease of 3.7% compared to$89.6 million adjusted EBITDA in Q1 2018.
In Q2 2018,
Q2 2018 reported EBITDA was
The differences between reported and adjusted figures derive from the bargain purchase gain that has been recorded as a result of the Company’s acquisition of manganese alloys plants at Mo I Rana,
During the second quarter, cash flow used for operations was
Sales in Q2 2018 totaled
- Silicon metal increased by 0.4% to
$2,773 /MT in Q2 2018, as compared to$2,762 /MT in Q1 2018; - Silicon-based alloys decreased by 2.4% to
$1,908 /MT in Q2 2018, as compared to$1,956 /MT in Q1 2018; and - Manganese-based alloys decreased by 5.2% to
$1,304 /MT in Q2 2018, as compared to$1,375 /MT in Q1 2018.
While sales volumes of:
- Silicon metal experienced a 6.2% decrease quarter-over-quarter,
- Silicon-based alloys experienced a 2.5% increase quarter-over-quarter, and
- Manganese-based alloys experienced a 51.0% increase quarter-over-quarter.
Quarter Ended | Quarter Ended | Quarter Ended | Six Months Ended | Six Months Ended | |||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | |||||||||||
Shipments in metric tons: | |||||||||||||||
Silicon Metal | 85,913 | 91,615 | 82,881 | 177,528 | 158,634 | ||||||||||
Silicon-based Alloys | 78,214 | 76,328 | 70,913 | 154,542 | 146,299 | ||||||||||
Manganese-based Alloys | 107,457 | 71,176 | 64,403 | 178,633 | 128,103 | ||||||||||
Total shipments* | 271,584 | 239,119 | 218,197 | 510,703 | 433,036 | ||||||||||
Quarter Ended | Quarter Ended | Quarter Ended | Six Months Ended | Six Months Ended | |||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | |||||||||||
Average selling price ($/MT): | |||||||||||||||
Silicon Metal | $ | 2,773 | $ | 2,762 | $ | 2,210 | $ | 2,767 | $ | 2,148 | |||||
Silicon-based Alloys | $ | 1,908 | $ | 1,956 | $ | 1,586 | $ | 1,932 | $ | 1,528 | |||||
Manganese-based Alloys | $ | 1,304 | $ | 1,375 | $ | 1,308 | $ | 1,332 | $ | 1,303 | |||||
Total* | $ | 1,943 | $ | 2,092 | $ | 1,741 | $ | 2,013 | $ | 1,688 | |||||
Quarter Ended | Quarter Ended | Quarter Ended | Six Months Ended | Six Months Ended | |||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | |||||||||||
Average selling price ($/lb.): | |||||||||||||||
Silicon Metal | $ | 1.26 | $ | 1.25 | $ | 1.00 | $ | 1.26 | $ | 0.97 | |||||
Silicon-based Alloys | $ | 0.87 | $ | 0.89 | $ | 0.72 | $ | 0.88 | $ | 0.69 | |||||
Manganese-based Alloys | $ | 0.59 | $ | 0.62 | $ | 0.59 | $ | 0.60 | $ | 0.59 | |||||
Total* | $ | 0.88 | $ | 0.95 | $ | 0.79 | $ | 0.91 | $ | 0.77 |
* Excludes by-products and other
“This was a solid quarter for
Cash flow generation impacted by acquisition related working capital
During the second quarter, cash flows used for operations was
Ferroglobe’s net debt was
“We continue to be focused on cash generation and deleveraging the balance sheet,” said
The Company has declared an interim dividend
Ferroglobe’s Board of Directors has declared an interim dividend of
Adjusted EBITDA:
Quarter Ended | Quarter Ended | Quarter Ended | Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||||||
Profit (loss) attributable to the parent | $ | 67,438 | $ | 36,680 | $ | 2,859 | $ | 104,118 | $ | (3,695 | ) | |||||||||
Loss attributable to non-controlling interest | (1,408 | ) | (1,066 | ) | (1,859 | ) | (2,474 | ) | (3,420 | ) | ||||||||||
Income tax expense (benefit) | 14,302 | 15,668 | (1,949 | ) | 29,970 | (3,163 | ) | |||||||||||||
Net finance expense | 14,412 | 13,156 | 14,547 | 27,568 | 27,517 | |||||||||||||||
Financial derivatives (gain) loss | (2,832 | ) | 1,765 | 4,071 | (1,067 | ) | 4,071 | |||||||||||||
Exchange differences | 8,708 | (729 | ) | (7,263 | ) | 7,979 | (7,243 | ) | ||||||||||||
Depreciation and amortization charges, operating allowances and write-downs | 30,309 | 28,016 | 26,401 | 58,325 | 53,623 | |||||||||||||||
EBITDA | 130,929 | 93,490 | 36,807 | 224,419 | 67,690 | |||||||||||||||
Non-controlling interest settlement | — | — | 1,751 | — | 1,751 | |||||||||||||||
Power credit | — | — | (3,696 | ) | — | (3,696 | ) | |||||||||||||
Long lived asset charge due to reclassification of discontinued operations to continuing operations | — | — | 2,608 | — | 2,608 | |||||||||||||||
Accrual of contingent liabilities | — | — | 6,400 | — | 6,400 | |||||||||||||||
Bargain purchase gain | (44,633 | ) | — | — | (44,633 | ) | — | |||||||||||||
Share-based compensation | — | (3,886 | ) | — | (3,886 | ) | — | |||||||||||||
Adjusted EBITDA | $ | 86,296 | $ | 89,604 | $ | 43,870 | $ | 175,900 | $ | 74,753 | ||||||||||
Adjusted profit attributable to
Quarter Ended | Quarter Ended | Quarter Ended | Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||||||
Profit (loss) attributable to the parent | $ | 67,438 | $ | 36,680 | $ | 2,859 | 104,118 | $ | (3,695 | ) | ||||||||||
Tax rate adjustment | (11,404 | ) | (742 | ) | (1,645 | ) | (12,146 | ) | 126 | |||||||||||
Non-controlling interest settlement | — | — | 1,191 | — | 1,191 | |||||||||||||||
Power credit | — | — | (2,513 | ) | — | (2,513 | ) | |||||||||||||
Long lived asset charge due to reclassification of discontinued operations to continuing operations | — | — | 1,773 | — | 1,773 | |||||||||||||||
Accrual of contingent liabilities | — | — | 4,352 | — | 4,352 | |||||||||||||||
Bargain purchase gain | (30,350 | ) | — | — | (30,350 | ) | — | |||||||||||||
Share-based compensation | — | (2,642 | ) | — | (2,642 | ) | — | |||||||||||||
Adjusted profit attributable to the parent | $ | 25,684 | $ | 33,296 | $ | 6,017 | 58,980 | $ | 1,234 | |||||||||||
Adjusted diluted profit per share:
Quarter Ended | Quarter Ended | Quarter Ended | Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||||||
Diluted profit (loss) per ordinary share | $ | 0.39 | $ | 0.21 | $ | 0.02 | $ | 0.60 | $ | (0.02 | ) | |||||||||
Tax rate adjustment | (0.07 | ) | — | (0.01 | ) | (0.07 | ) | — | ||||||||||||
Non-controlling interest settlement | — | — | 0.01 | — | 0.01 | |||||||||||||||
Power credit | — | — | (0.01 | ) | — | (0.01 | ) | |||||||||||||
Long lived asset charge due to reclassification of discontinued operations to continuing operations | — | — | 0.01 | — | 0.01 | |||||||||||||||
Accrual of contingent liabilities | — | — | 0.03 | — | 0.03 | |||||||||||||||
Bargain purchase gain | (0.18 | ) | — | — | (0.18 | ) | — | |||||||||||||
Share-based compensation | — | (0.02 | ) | — | (0.02 | ) | — | |||||||||||||
Adjusted diluted profit per ordinary share | $ | 0.14 | $ | 0.19 | $ | 0.05 | $ | 0.33 | $ | 0.02 | ||||||||||
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About
Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of U.S. securities laws. Forward-looking statements are not historical facts but are based on certain assumptions of management and describe the Company’s future plans, strategies and expectations. Forward-looking statements often use forward-looking terminology, including words such as "anticipate", "believe", "could", "estimate", "expect", "forecast", "guidance", "intends", "likely", "may", "plan", "potential", "predicts", "seek", "will" and words of similar meaning or the negative thereof.
Forward-looking statements contained in this press release are based on information currently available to the Company and assumptions that management believe to be reasonable, but are inherently uncertain. As a result, Ferroglobe’s actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements, which are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control.
Forward-looking financial information and other metrics presented herein represent the Company’s goals and are not intended as guidance or projections for the periods referenced herein or any future periods.
All information in this press release is as of the date of its release. Ferroglobe does not undertake any obligation to update publicly any of the forward-looking statements contained herein to reflect new information, events or circumstances arising after the date of this press release. You should not place undue reliance on any forward-looking statements, which are made only as of the date of this press release.
Non-IFRS Measures
EBITDA, adjusted EBITDA, adjusted diluted profit (loss) per ordinary share and adjusted profit (loss) are non-IFRS financial metrics that, we believe, are pertinent measures of Ferroglobe’s success.
INVESTOR CONTACT:
Chief Financial Officer
Email: phillip.murnane@ferroglobe.com
Ferroglobe PLC and Subsidiaries Unaudited Condensed Consolidated Income Statement (in thousands of U.S. dollars, except per share amounts) |
||||||||||||||||||||
Quarter Ended | Quarter Ended | Quarter Ended | Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||||||
Sales | $ | 582,977 | $ | 560,704 | $ | 425,810 | $ | 1,143,681 | $ | 821,847 | ||||||||||
Cost of sales | (343,817 | ) | (320,678 | ) | (250,279 | ) | (664,495 | ) | (491,417 | ) | ||||||||||
Other operating income | 8,511 | 6,786 | 4,008 | 15,297 | 5,637 | |||||||||||||||
Staff costs | (88,743 | ) | (82,423 | ) | (74,168 | ) | (171,166 | ) | (140,653 | ) | ||||||||||
Other operating expense | (75,384 | ) | (70,862 | ) | (65,009 | ) | (146,246 | ) | (125,133 | ) | ||||||||||
Depreciation and amortization charges, operating allowances and write-downs | (30,309 | ) | (28,016 | ) | (26,401 | ) | (58,325 | ) | (53,623 | ) | ||||||||||
Bargain purchase gain | 44,633 | — | — | 44,633 | — | |||||||||||||||
Other gain (loss) | 2,752 | (37 | ) | (3,555 | ) | 2,715 | (2,591 | ) | ||||||||||||
Operating profit | 100,620 | 65,474 | 10,406 | 166,094 | 14,067 | |||||||||||||||
Net finance expense | (14,412 | ) | (13,156 | ) | (14,547 | ) | (27,568 | ) | (27,517 | ) | ||||||||||
Financial derivatives gain (loss) | 2,832 | (1,765 | ) | (4,071 | ) | 1,067 | (4,071 | ) | ||||||||||||
Exchange differences | (8,708 | ) | 729 | 7,263 | (7,979 | ) | 7,243 | |||||||||||||
Profit (loss) before tax | 80,332 | 51,282 | (949 | ) | 131,614 | (10,278 | ) | |||||||||||||
Income tax (expense) benefit | (14,302 | ) | (15,668 | ) | 1,949 | (29,970 | ) | 3,163 | ||||||||||||
Profit (loss) for the period | 66,030 | 35,614 | 1,000 | 101,644 | (7,115 | ) | ||||||||||||||
Loss attributable to non-controlling interest | 1,408 | 1,066 | 1,859 | 2,474 | 3,420 | |||||||||||||||
Profit (loss) attributable to the parent | $ | 67,438 | $ | 36,680 | $ | 2,859 | $ | 104,118 | $ | (3,695 | ) | |||||||||
EBITDA | $ | 130,929 | $ | 93,490 | $ | 36,807 | $ | 224,419 | $ | 67,690 | ||||||||||
Adjusted EBITDA | $ | 86,296 | $ | 89,604 | $ | 43,870 | $ | 175,900 | $ | 74,753 | ||||||||||
Weighted average shares outstanding | ||||||||||||||||||||
Basic | 171,987 | 171,977 | 171,947 | 171,982 | 171,947 | |||||||||||||||
Diluted | 172,127 | 172,215 | 172,047 | 172,144 | 171,947 | |||||||||||||||
Profit (loss) per ordinary share | ||||||||||||||||||||
Basic | $ | 0.39 | $ | 0.21 | $ | 0.02 | $ | 0.61 | $ | (0.02 | ) | |||||||||
Diluted | $ | 0.39 | $ | 0.21 | $ | 0.02 | $ | 0.60 | $ | (0.02 | ) |
Ferroglobe PLC and Subsidiaries | ||||||||||
Unaudited Condensed Consolidated Statement of Financial Position | ||||||||||
(in thousands of U.S. dollars) | ||||||||||
June 30, | March 30, | December 31, | ||||||||
2018 | 2018 | 2017 | ||||||||
ASSETS | ||||||||||
Non-current assets | ||||||||||
Goodwill | $ | 203,717 | $ | 204,537 | $ | 205,287 | ||||
Other intangible assets | 57,897 | 61,774 | 58,658 | |||||||
Property, plant and equipment | 947,229 | 980,101 | 917,974 | |||||||
Non-current financial assets | 116,974 | 147,744 | 89,315 | |||||||
Deferred tax assets | 3,972 | 6,581 | 5,273 | |||||||
Non-current receivables from related parties | 2,332 | 2,464 | 2,400 | |||||||
Other non-current assets | 18,887 | 32,125 | 30,059 | |||||||
Total non-current assets | 1,351,008 | 1,435,326 | 1,308,966 | |||||||
Current assets | ||||||||||
Inventories | 532,574 | 493,108 | 361,231 | |||||||
Trade and other receivables | 151,062 | 142,641 | 111,463 | |||||||
Current receivables from related parties | 5,550 | 8,841 | 4,572 | |||||||
Current income tax assets | 10,405 | 6,524 | 17,158 | |||||||
Current financial assets | 854 | 897 | 2,469 | |||||||
Other current assets | 18,283 | 16,095 | 9,926 | |||||||
Cash and cash equivalents | 155,984 | 197,669 | 184,472 | |||||||
Total current assets | 874,712 | 865,775 | 691,291 | |||||||
Total assets | $ | 2,225,720 | $ | 2,301,101 | $ | 2,000,257 | ||||
EQUITY AND LIABILITIES | ||||||||||
Equity | $ | 1,004,125 | $ | 979,504 | $ | 937,758 | ||||
Non-current liabilities | ||||||||||
Deferred income | 5,387 | 7,321 | 3,172 | |||||||
Provisions | 78,767 | 82,957 | 82,397 | |||||||
Bank borrowings | 108,143 | 71,242 | - | |||||||
Obligations under finance leases | 61,078 | 68,101 | 69,713 | |||||||
Debt instruments | 340,564 | 341,036 | 339,332 | |||||||
Other financial liabilities | 42,138 | 58,288 | 49,011 | |||||||
Other non-current liabilities | 21,178 | 64,457 | 3,536 | |||||||
Deferred tax liabilities | 64,689 | 64,733 | 65,142 | |||||||
Total non-current liabilities | 721,944 | 758,135 | 612,303 | |||||||
Current liabilities | ||||||||||
Provisions | 22,563 | 30,162 | 33,095 | |||||||
Bank borrowings | 1,241 | 850 | 1,003 | |||||||
Obligations under finance leases | 13,024 | 13,478 | 12,920 | |||||||
Debt instruments | 10,936 | 2,735 | 10,938 | |||||||
Other financial liabilities | 54,158 | 91,243 | 88,420 | |||||||
Payables to related parties | 17,599 | 10,671 | 12,973 | |||||||
Trade and other payables | 276,289 | 298,438 | 192,859 | |||||||
Current income tax liabilities | 4,210 | 5,889 | 7,419 | |||||||
Other current liabilities | 99,631 | 109,996 | 90,569 | |||||||
Total current liabilities | 499,651 | 563,462 | 450,196 | |||||||
Total equity and liabilities | $ | 2,225,720 | $ | 2,301,101 | $ | 2,000,257 | ||||
Ferroglobe PLC and Subsidiaries | |||||||||||||||||||||
Unaudited Condensed Consolidated Statement of Cash Flows | |||||||||||||||||||||
(in thousands of U.S. dollars) | |||||||||||||||||||||
Quarter Ended | Quarter Ended | Quarter Ended | Six Months Ended | Six Months Ended | |||||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | |||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Profit (loss) for the period | $ | 66,030 | $ | 35,614 | $ | 1,000 | $ | 101,644 | $ | (7,115 | ) | ||||||||||
Adjustments to reconcile net profit (loss) to net cash (used) provided by operating activities: |
|||||||||||||||||||||
Income tax expense (benefit) | 14,302 | 15,668 | (1,949 | ) | 29,970 | (3,163 | ) | ||||||||||||||
Depreciation and amortization charges, operating allowances and write-downs |
30,309 | 28,016 | 26,401 | 58,325 | 53,623 | ||||||||||||||||
Net finance expense | 14,412 | 13,156 | 14,547 | 27,568 | 27,517 | ||||||||||||||||
Financial derivatives (gain) loss | (2,832 | ) | 1,765 | 4,071 | (1,067 | ) | 4,071 | ||||||||||||||
Exchange differences | 8,708 | (729 | ) | (7,263 | ) | 7,979 | (7,243 | ) | |||||||||||||
Bargain purchase gain | (44,633 | ) | — | — | (44,633 | ) | — | ||||||||||||||
Share-based compensation | 33 | 699 | — | 732 | — | ||||||||||||||||
Other adjustments | (2,752 | ) | 37 | 3,556 | (2,715 | ) | 2,592 | ||||||||||||||
Changes in operating assets and liabilities | |||||||||||||||||||||
(Increase) decrease in inventories | (59,050 | ) | (107,481 | ) | (11,943 | ) | (166,531 | ) | (4,835 | ) | |||||||||||
(Increase) decrease in trade receivables | (19,257 | ) | (513 | ) | 9,456 | (19,770 | ) | 13,221 | |||||||||||||
Increase in trade payables | 476 | 70,375 | (8,943 | ) | 70,851 | 9,213 | |||||||||||||||
Other | 6,817 | (49,770 | ) | (506 | ) | (42,953 | ) | (35,051 | ) | ||||||||||||
Income taxes paid | (14,186 | ) | (9,982 | ) | (3,919 | ) | (24,168 | ) | (6,216 | ) | |||||||||||
Interest paid | (2,957 | ) | (17,301 | ) | (4,378 | ) | (20,258 | ) | (14,107 | ) | |||||||||||
Net cash (used) provided by operating activities | (4,580 | ) | (20,446 | ) | 20,130 | (25,026 | ) | 32,507 | |||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Payments due to investments: | |||||||||||||||||||||
Other intangible assets | (2,221 | ) | (703 | ) | — | (2,924 | ) | (410 | ) | ||||||||||||
Property, plant and equipment | (29,778 | ) | (22,531 | ) | (14,319 | ) | (52,309 | ) | (26,681 | ) | |||||||||||
Other | (8 | ) | — | — | (8 | ) | (14 | ) | |||||||||||||
Disposals: | |||||||||||||||||||||
Other non-current assets | 12,734 | — | — | 12,734 | — | ||||||||||||||||
Other | 1,904 | 4,010 | — | 5,914 | — | ||||||||||||||||
Acquisition of subsidiary | — | (20,379 | ) | — | (20,379 | ) | — | ||||||||||||||
Interest and finance income received | 2,273 | 79 | 211 | 2,352 | 564 | ||||||||||||||||
Net cash used by investing activities | (15,096 | ) | (39,524 | ) | (14,108 | ) | (54,620 | ) | (26,541 | ) | |||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Dividends paid | (10,321 | ) | — | — | (10,321 | ) | — | ||||||||||||||
Payment for debt issuance costs | — | (4,476 | ) | (3,078 | ) | (4,476 | ) | (13,555 | ) | ||||||||||||
Repayment of other financial liabilities | (33,096 | ) | — | — | (33,096 | ) | — | ||||||||||||||
Proceeds from debt issuance | — | — | — | — | 350,000 | ||||||||||||||||
Increase/(decrease) in bank borrowings: | |||||||||||||||||||||
Borrowings | 37,668 | 182,364 | 30 | 220,032 | 31,455 | ||||||||||||||||
Payments | — | (106,514 | ) | (15,300 | ) | (106,514 | ) | (387,680 | ) | ||||||||||||
Proceeds from stock option exercises | 240 | — | — | 240 | — | ||||||||||||||||
Other amounts paid due to financing activities | (4,648 | ) | (2,987 | ) | (10,694 | ) | (7,635 | ) | (17,905 | ) | |||||||||||
Net cash (used) provided by financing activities | (10,157 | ) | 68,387 | (29,042 | ) | 58,230 | (37,685 | ) | |||||||||||||
Total net cash flows for the period | (29,833 | ) | 8,417 | (23,020 | ) | (21,416 | ) | (31,719 | ) | ||||||||||||
Beginning balance of cash and cash equivalents | 197,669 | 184,472 | 193,031 | 184,472 | 196,982 | ||||||||||||||||
Exchange differences on cash and cash equivalents in foreign currencies |
(11,852 | ) | 4,780 | 13,550 | (7,072 | ) | 18,298 | ||||||||||||||
Ending balance of cash and cash equivalents | $ | 155,984 | $ | 197,669 | $ | 183,561 | $ | 155,984 | $ | 183,561 | |||||||||||
Source: Ferroglobe PLC