• Q2 sales of $418.5 million, up 15.8% compared to $361.4 million in Q1 2021, and up 67.4% compared to $250.0 million in Q2 2020
  • Adjusted EBITDA of $34.1 million, up 54.5% compared to $22.1 million in Q1 2021, and up 52.1% compared to $22.4 million in Q2 2020
  • Q2 marks a return to positive net profit of $0.7 million compared to net loss of ($68.5) million in Q1 2021, and ($14.0) million in Q2 2020
  • Positive operating cash flow of $37.8 million and a return to positive net cash flow of $21.6 million
  • Working capital increase of marginally $0.6 million in Q2 2021; increased efficiency supporting flat level of working capital despite the ramp-up in activity
  • Improved production costs mainly driven by higher fixed cost absorption, and focused initiatives targeting key technical metrics
  • Completion and funding of financiang transactions (extension of bond maturity and issuance of the new super senior secured notes and equity) on July 30, 2021

LONDON, Aug. 23, 2021 (GLOBE NEWSWIRE) -- Ferroglobe PLC (NASDAQ: GSM) (“Ferroglobe”, the “Company”, or the “Parent”), a leading producer globally of silicon metal, silicon-based and manganese-based specialty alloys, today announced results for the second quarter 2021.

Q2 2021 Earnings Highlights

In Q2 2021, Ferroglobe posted a net profit of $0.7 million, or $0.01 per share on a fully diluted basis. On an adjusted basis, the Q2 2021 net profit was $3.0 million, or $0.02 per share on a fully diluted basis.

Q2 2021 reported EBITDA was $31.9 million, up from ($18.9) million in the prior quarter. On an adjusted basis, Q2 2021 EBITDA was $34.1 million, up from adjusted EBITDA of $22.1 million in Q1 2021. The Company reported an adjusted EBITDA margin of 8.1% for Q2 2021, compared to 6.1% for Q1 2021.

               
 Quarter Ended    Quarter Ended Quarter Ended Year Ended  Year Ended
$,000 (unaudited)June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
               
Sales$418,538  $361,390  $250,004  $779,928  $561,226 
Net profit (loss)$730  $(68,517) $(14,035) $(67,787) $(63,093)
Diluted EPS$0.01  $(0.40) $(0.07) $(0.39) $(0.35)
Adjusted net income (loss) attributable to the parent$2,964  $(18,172) $(11,064) $(15,208) $(48,777)
Adjusted diluted EPS$0.02  $(0.12) $(0.07) $(0.10) $(0.29)
Adjusted EBITDA$34,088  $22,069  $22,413  $56,157  $4,796 
Adjusted EBITDA margin 8.1%  6.1%  9.0%  7.2%  0.9%

Marco Levi, Ferroglobe’s Chief Executive Officer, commented, “The second quarter results reflect a strong improvement in our overall performance and marks the return to profitability, an important goal for this year. Both the top line and bottom line continue to strengthen due to successful execution of the strategic plan, as well as the overall robustness across our all of our markets.” Dr. Levi added, “As we look towards the back half of the year, we will keep the momentum going on all fronts to capitalize on the market opportunities and successfully execute some critical initiatives underpinning the strategic plan. Collectively, these efforts support the focus on improving the core of our business and ensuring a stronger and more profitable Company.”

Cash Flow and Balance Sheet

Cash generated from operations during Q2 2021 was $37.8 million, and the Company returned to positive net cash flow of $21.6 million during the quarter.

Working capital only increased by $0.6 million, from $334.3 million as of June 30, 2021 to $333.7 million as of March 31, 2021. Increased emphasis on operational and financial efficiencies resulted in this relatively flat level of working capital despite the ramp-up in activity.

Net debt was $358 million as of June 30, 2021, up from $334 million as of March 31, 2021. This is primarily attributable to the initial $40 million tranche raised during the quarter, of an aggregate $60 million of the new super senior secured. The subsequent $20 million tranche was closed and funded in the third quarter.

Beatriz García-Cos, Ferroglobe’s Chief Financial Officer, commented, “This marks an important quarter for the Company. The return to positive net income and positive net cash flow validates the on-going efforts to turnaround our financial performance. However, we remain far from reaching the full potential of this business. Our top line is not fully benefiting from the current market prices across our product portfolio as we have fixed price contracts which begin to roll off during the back half of the year. Furthermore, we had a number of one-off, non-recurring expenses which also adversely impacted our margins. We remain extremely focused on cost management, particularly to off-set inflationary pressures on energy pricing, mainly in Europe. These factors will collectively drive an acceleration in our performance and cash generation during the remainder of the year.” Ms. García-Cos added, “The comprehensive financing we completed in July now provides the financial support to execute on important elements of the transformation plan and ensures a capital structure that provides the operational flexibility to capitalize on this strong market backdrop.”

COVID-19

COVID-19 has been and continues to be a complex and evolving situation, with governments, public institutions and other organizations imposing or recommending, and businesses and individuals implementing, at various times and to varying degrees, restrictions on various activities or other actions to combat its spread, such as restrictions and bans on travel or transportation; limitations on the size of in-person gatherings, restrictions on freight transportations, closures of, or occupancy or other operating limitations on work facilities, and quarantines and lock-downs.

As a result of this pandemic and the strict confinement and other public health measures taken around the world, the demand for our products in the second and third quarters of 2020 was reduced significantly compared with the first and fourth quarters of the year. During the fourth quarter of 2020, demand level for our products increased to levels similar to those prior to the outbreak. In first and second quarter of 2021, demand for our products has increased even further than in the fourth quarter of 2020. However, COVID-19 has negatively impacted, and will in the future negatively impact to an extent we are unable to predict, our revenues.

Subsequent events

On July 30, 2021, the Company announces the occurrence of “Transaction Effective Date” under Lock-up agreement dated March 27, 2021 and completion of the financing transactions. The financing consisted of:

(i)      Extension of the maturity date of the Notes from March 31, 2022 to December 31, 2025

(ii)     Issuance of $60 million of new senior secured notes, and

(iii)     $40 million of equity issuance

Discussion of Second Quarter 2021 Results

The financial results presented for the second quarter are unaudited.

Sales

Sales for Q2 2021 were $418.5 million, an increase of 15.8% compared to $361.4 million in Q1 2021.

                      
     Quarter Ended    Quarter Ended      Quarter Ended   Six months Ended Six months Ended 
  June 30, 2021 March 31, 2021 Change June 30, 2020 Change June 30, 2021 June 30, 2020 Change
Shipments in metric tons:                     
Silicon Metal  67,322  61,275 9.9%  47,884 40.6%  128,597  101,205 27.1%
Silicon-based Alloys  65,222  61,604 5.9%  39,479 65.2%  126,826  100,411 26.3%
Manganese-based Alloys  68,323  72,609 (5.9)%  55,290 23.6%  140,932  129,014 9.2%
Total shipments*  200,867  195,488 2.8%  142,653 40.8%  396,355  330,630 19.9%
                      
Average selling price ($/MT):                     
Silicon Metal $2,347 $2,285 2.7% $2,215 5.9% $2,317 $2,213 4.7%
Silicon-based Alloys $1,830 $1,665 9.9% $1,537 19.0% $1,750 $1,499 16.7%
Manganese-based Alloys $1,414 $1,174 20.5% $1,088 30.0% $1,290 $1,022 26.2%
Total* $1,862 $1,677 11.0% $1,591 17.0% $1,770 $1,531 15.6%
                      
Average selling price ($/lb.):                     
Silicon Metal $1.06 $1.04 2.4% $1.00 5.9% $1.05 $1.00 4.7%
Silicon-based Alloys $0.83 $0.76 9.2% $0.70 19.0% $0.79 $0.68 16.7%
Manganese-based Alloys $0.64 $0.53 21.0% $0.49 30.0% $0.59 $0.46 26.2%
Total* $0.84 $0.76 11.0% $0.72 17.0% $0.80 $0.69 15.6%

__________________

* Excludes by-products and other

Sales Prices & Volumes By Product

During Q2 2021, the average selling prices across our product portfolio increased by 11.0% versus Q1 2021. During the quarter, the average selling prices of silicon metal increased 2.7%, silicon-based alloys prices increased 9.9%, and manganese-based alloys prices increased 20.5%.

Overall sales volumes in Q2 increased by 2.8% versus the prior quarter. During the quarter, the shipmentsof silicon metal increased 9.9%, silicon-based alloys shipments increased 5.9%, and manganese-based alloys shipments decreased 5.9% versus Q1 2021.

Cost of Sales

Cost of sales was $267.9 million in Q2 2021, an increase from $250.2 million in the prior quarter. Cost of sales as a percentage of sales decreased to 64.0% in Q2 2021 versus 69.2% for Q1 2021. This improvement is primarily attributable to higher sales and a reclassification from this account to Other operating expenses to conform the group presentation.

Other Operating Expenses

Other operating expenses amounted to $57.6 million in Q2 2021, an increase from $36.8 million in the prior quarter. The increase in these expenses was mainly due to the impact of the European free CO2 rights for 2021. The free allowance of these CO2 rights are recognized in Other Operating Income.        

Net Loss Attributable to the Parent

In Q2 2021, net profit attributable to the Parent was $1.9 million, or $0.01 per diluted share, compared to a net loss attributable to the Parent of $67.4 million million, or ($0.40) per diluted share in Q1 2021.

Adjusted EBITDA

In Q2 2021, adjusted EBITDA was $34.1 million, or 8.1% of sales, up 54.5% compared to adjusted EBITDA of $22.1 million, or 6.1% of sales in Q1 2021. The increase in the Q2 2021 Adjusted EBITDA is primarily driven by the improvement in average realized prices across the product portfolio.

Conference Call

Ferroglobe management will review the first quarter during a conference call at 9:00 a.m. Eastern Time on August 24, 2021.

The dial-in number for participants in the United States is +1-877-293-5491 (conference ID: 7458760). International callers should dial +1-914-495-8526 (conference ID: 7458760). Please dial in at least five minutes prior to the call to register. The call may also be accessed via an audio webcast available at https://edge.media-server.com/mmc/p/hqshmr5i

About Ferroglobe

Ferroglobe is one of the world’s leading suppliers of silicon metal, silicon-based and manganese-based specialty alloys and ferroalloys, serving a customer base across the globe in dynamic and fast-growing end markets, such as solar, automotive, consumer products, construction and energy. The Company is based in London. For more information, visit http://investor.ferroglobe.com.

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”, “target”, “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

Adjusted EBITDA, adjusted EBITDA margin, adjusted net profit, adjusted profit per share, working capital and net debt, are non-IFRS financial metrics that, we believe, are pertinent measures of Ferroglobe’s success. Ferroglobe has included these financial metrics to provide supplemental measures of its performance. The Company believes these metrics are important because they eliminate items that have less bearing on the Company’s current and future operating performance and highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures.

INVESTOR CONTACT:

Gaurav Mehta
Executive Vice President – Investor Relations 
Email:   investor.relations@ferroglobe.com

MEDIA CONTACT:

Cristina Feliu Roig
Executive Director – Communications & Public Affairs
Email:   corporate.comms@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    Year Ended  Year Ended
 June 30, 2021    March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Sales$418,538   $361,390  $250,004  $779,928  $561,226 
Cost of sales (267,939)   (250,165)  (153,291)  (518,104)  (396,651)
Other operating income 37,105    1,913   10,160   39,018   17,928 
Staff costs (63,197)   (95,267)  (48,912)  (158,464)  (104,009)
Other operating expense (93,171)   (36,835)  (35,953)  (130,006)  (76,020)
Depreciation and amortization charges, operating allowances and write-downs (23,523)   (25,285)  (27,459)  (48,808)  (56,127)
Other (loss) gain 608   66   86   674   (586)
Operating profit (loss)   8,421    (44,183)   (5,365)   (35,762)   (54,239)
Net finance expense (11,178)   (15,864)  (16,693)  (27,042)  (33,177)
Financial derivatives gain —   —   —   —   3,168 
Exchange differences 3,237    (9,314)  2,634   (6,077)  5,069 
Profit (loss) before tax  480     (69,361)   (19,425)   (68,881)   (79,179)
Income tax benefit 250    844   5,390   1,094   16,086 
Profit (loss) for the period  730    (68,517)   (14,035)   (67,787)   (63,093)
Profit attributable to non-controlling interest 1,180    1,135   1,928   2,315   3,087 
Profit (loss) attributable to the parent$ 1,910   $ (67,382) $ (12,107) $ (65,472) $ (60,006)
                
               
EBITDA$31,944  $(18,898) $22,094  $13,046  $1,888 
Adjusted EBITDA$34,088  $22,069  $22,413  $56,157  $4,796 
               
Weighted average shares outstanding              
Basic 169,298   169,291   169,254   169,295   169,252 
Diluted 169,298   169,291   169,254   169,295   169,252 
               
Profit (loss) per ordinary share              
Basic$0.01  $(0.40) $(0.07) $(0.39) $(0.35)
Diluted$0.01  $(0.40) $(0.07) $(0.39) $(0.35)
                    


 
Ferroglobe PLC and Subsidiaries
Unaudited Condensed Consolidated Statement of Financial Position
(in thousands of U.S. dollars)
          
  June 30, March 31, December 31
     2021    2021    2020
ASSETS
Non-current assets         
Goodwill $29,702 $29,702 $29,702
Other intangible assets  87,556  25,891  20,756
Property, plant and equipment  587,602  593,355  620,034
Other non-current financial assets  5,329  4,984  5,057
Deferred tax assets  62  620  —
Non-current receivables from related parties  2,377  2,345  2,454
Other non-current assets  13,960  11,765  11,904
Total non-current assets   726,588   668,662   689,907
Current assets         
Inventories  239,750  228,145  246,549
Trade and other receivables  283,990  276,633  242,262
Current receivables from related parties  3,105  3,063  3,076
Current income tax assets  8,826  12,277  12,072
Other current financial assets  1,003  1,004  1,008
Other current assets  57,219  45,028  20,714
Current restricted cash and cash equivalents  6,149  6,069  28,843
Cash and cash equivalents  99,940  78,298  102,714
Total current assets   699,982   650,517   657,238
Total assets $ 1,426,570 $ 1,319,179 $ 1,347,145
          
EQUITY AND LIABILITIES
Equity $ 299,469 $ 298,974 $ 365,719
Non-current liabilities         
Deferred income  37,570  2,733  620
Provisions  107,501  106,220  108,487
Bank borrowings  4,871  5,042  5,277
Lease liabilities  12,995  11,942  13,994
Debt instruments  386,060  347,310  346,620
Other financial liabilities  37,608  37,530  29,094
Other non-current liabilities  16,955  16,727  16,767
Deferred tax liabilities  23,956  26,834  27,781
Total non-current liabilities   627,516   554,338   548,640
Current liabilities         
Provisions  102,269  97,521  55,296
Bank borrowings  85,015  73,965  102,330
Lease liabilities  8,709  7,596  8,542
Debt instruments  10,858  2,656  10,888
Other financial liabilities  23,732  24,983  34,802
Payables to related parties  6,131  5,042  3,196
Trade and other payables  189,449  171,052  149,201
Current income tax liabilities  513  3,947  2,538
Other current liabilities  72,909  79,105  65,993
Total current liabilities   499,585   465,867   432,786
Total equity and liabilities $ 1,426,570 $ 1,319,179 $ 1,347,145
 


 
Ferroglobe PLC and Subsidiaries
Unaudited Condensed Consolidated Statement of Cash Flows
(in thousands of U.S. dollars)
               
 Quarter Ended    Quarter Ended    Quarter Ended  Year Ended  Year Ended
 June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Cash flows from operating activities:              
Profit (loss) for the period$ 730  $ (68,517) $ (14,035) $ (67,787) $ (63,093)
Adjustments to reconcile net (loss) profit
to net cash used by operating activities:		              
Income tax (benefit) expense (250)  (844)  (5,390)  (1,094)  (16,086)
Depreciation and amortization charges,
operating allowances and write-downs		 23,523   25,285   27,459   48,808   56,127 
Net finance expense 11,178   15,864   16,693   27,042   33,177 
Financial derivatives loss (gain) —   —   —   —   (3,168)
Exchange differences (3,237)  9,314   (2,634)  6,077   (5,069)
Net loss (gain) due to changes in the value of asset (243)  (21)  —   (264)  — 
Gain on disposal of non-current assets —   (43)  —   (43)  — 
Share-based compensation 673   213   704   886   1,426 
Other adjustments (366)  (2)  (85)  (368)  586 
Changes in operating assets and liabilities          —   — 
(Increase) decrease in inventories (8,770)  11,446   (12,471)  2,676   39,106 
(Increase) decrease in trade receivables (8,625)  (41,692)  45,537   (50,317)  129,369 
Increase (decrease) in trade payables 16,184   26,152   (4,875)  42,336   (30,379)
Other 8,214   41,179   (16,286)  49,393   (27,884)
Income taxes paid (1,178)  (57)  3,522   (1,235)  13,641 
Net cash provided (used) by operating activities  37,833    18,277    38,139    56,110    127,753 
Cash flows from investing activities:              
Interest and finance income received 128   35   85   163   339 
Payments due to investments:          -     
Acquisition of subsidiary —   —   —   —   — 
Other intangible assets (40,997)  (3,486)  —   (44,483)  — 
Property, plant and equipment (3,245)  (5,683)  (5,056)  (8,928)  (9,662)
Other —   —   —   —   — 
Disposals:    —      —   — 
Disposal of subsidiaries —   —   —   —   — 
Other non-current assets 543   —   —   543   — 
Other —   —   —   —   — 
Net cash (used) provided by investing activities  (43,571)   (9,134)   (4,971)   (52,705)   (9,323)
Cash flows from financing activities:              
Dividends paid —   —   —   —   — 
Payment for debt issuance costs (11,093)  (6,598)  (279)  (17,691)  (1,855)
Repayment of hydro leases —   —   —   —   — 
Proceeds from debt issuance 40,000   —   —   40,000   — 
Increase/(decrease) in bank borrowings:     —       —    — 
Borrowings 149,945   127,690   —   277,635   — 
Payments (144,983)  (157,464)  (20,680)  (302,447)  (65,560)
Proceeds from stock option exercises —   —   —   —   — 
Amounts paid due to leases (3,157)  (2,856)  (2,418)  (6,013)  (4,879)
Other amounts received/(paid) due to financing activities —   —   —   —   3,608 
Payments to acquire or redeem own shares —   —   —   —   — 
Interest paid (3,333)  (17,015)  (1,131)  (20,348)  (19,955)
Net cash (used) provided by financing activities  27,379    (56,243)   (24,508)   (28,864)   (88,641)
Total net cash flows for the period  21,641    (47,100)   8,660    (25,459)   29,789 
Beginning balance of cash and cash equivalents 84,367   131,557   144,489   131,557   123,175 
Exchange differences on cash and
cash equivalents in foreign currencies		 81   (90)  93   (9)  278 
Ending balance of cash and cash equivalents$ 106,089  $ 84,367  $ 153,242  $ 106,089  $ 153,242 
Cash from continuing operations 99,940   78,298   124,876   99,940   124,876 
Current/Non-current restricted cash and cash equivalents 6,149   6,069   28,366   6,149   28,366 
Cash and restricted cash in the statement of financial position$ 106,089  $ 84,367  $ 153,242  $ 106,089  $ 153,242 
 


 
Adjusted EBITDA ($,000):
               
 Quarter Ended    Quarter Ended    Quarter Ended Year Ended  Year Ended
 June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Profit (loss) attributable to the parent$ 1,910  $ (67,382) $ (12,107) $ (65,472) $ (60,006)
Profit (loss) attributable to non-controlling interest (1,180)  (1,135)  (1,928)  (2,315)  (3,087)
Income tax (benefit) expense (250)  (844)  (5,390)  (1,094)  (16,086)
Net finance expense 11,178   15,864   16,693   27,042   33,177 
Financial derivatives loss (gain) —   —   —   —   (3,168)
Exchange differences (3,237)  9,314   (2,634)  6,077   (5,069)
Depreciation and amortization charges, operating allowances and write-downs 23,523   25,285   27,459   48,808   56,127 
EBITDA  31,944    (18,898)   22,093    13,046    1,888 
Restructuring and termination costs 2,144   40,967   —   43,111   — 
Energy:  France —   —   (55)  —   70 
Staff Costs:  South Africa —   —   —   —   155 
Other Idling Costs —   —   375   —   2,683 
Adjusted EBITDA$ 34,088  $ 22,069  $ 22,413  $ 56,157  $ 4,796 
 


 
Adjusted profit attributable to Ferroglobe ($,000):
               
 Quarter Ended    Quarter Ended    Quarter Ended Year Ended  Year Ended
 June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Profit (loss) attributable to the parent$ 1,910  $ (67,382) $ (12,107) $ (65,472) $ (60,006)
Tax rate adjustment (404)  21,352   826   20,948   9,250 
Impairment —   —   —   —   — 
Restructuring and termination costs 1,458   27,858   —   29,315   — 
Energy:  France —   —   (37)  —   48 
Energy: South Africa —   —   —   —   — 
Staff Costs:  South Africa —   —   —   —   105 
Other Idling Costs —   —   255   —   1,824 
Tolling agreement —   —   —   —   — 
Adjusted profit (loss) attributable to the parent$ 2,964  $ (18,172) $ (11,064) $ (15,208) $ (48,777)
 


 
Adjusted diluted profit per share:
               
 Quarter Ended    Quarter Ended    Quarter Ended Year Ended  Year Ended
 June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Diluted profit (loss) per ordinary share$ 0.01  $ (0.40) $ (0.07) $ (0.39) $ (0.35)
Tax rate adjustment (0.00)  0.12   0.00   0.12   0.05 
Restructuring and termination costs 0.01   0.16   —   0.17   — 
Energy:  France —   —   (0.00)  —   0.00 
Energy: South Africa —   —   —   —   — 
Staff Costs:  South Africa —   —   —   —   0.00 
Other Idling Costs —   —   0.00   —   0.01 
Tolling agreement —   —   —   —   — 
Adjusted diluted profit (loss) per ordinary share$ 0.02  $ (0.12) $ (0.07) $ (0.10) $ (0.29)
 

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