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Ferroglobe Reports Solid Third Quarter 2022 Results Despite Weaker Market Conditions

Ferroglobe PLC
Ferroglobe PLC

LONDON, Nov. 15, 2022 (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 third quarter 2022.

FINANCIAL HIGHLIGHTS

  • Q3 2022 revenue of $593.2 million, down 29.5% over the prior quarter

  • Q3 2022 Adjusted EBITDA of $185.3 million, down 38.9% over the prior quarter

  • Adjusted EBITDA margin decrease of 5 percentage points to 31% in Q3 2022, down from 36% over the prior quarter

  • Net profit of $98.8 million (diluted earnings per share of $0.52), compared to net profit of $185.1 million (diluted earnings per share of $0.98) in Q2 2022

  • Net debt of $194 million at quarter end, similar at the end of Q2

  • Total cash of $236.8 million at quarter-end, down $69.7 million from the prior quarter

BUSINESS HIGHLIGHTS

  • Solid third quarter results despite weaker market conditions

  • Redeemed all $60 million of the 9% super senior secured notes due 2025

  • Board approval of our new medium to long term strategy

  • Planned restart of the Polokwane facility, adding 55,000 tons of silicon metal capacity in South Africa, providing access to strategically located lower-cost asset

  • Ramping up industrial production of 99.999% (3N) and 99.9999% (4N) micrometer size silicon metal at our Puertollano facility in Spain

Dr. Marco Levi, Ferroglobe’s Chief Executive Officer, commented, “During the third quarter, we have seen a challenging environment driven by demand slowdown and continued volatility in energy prices in Europe. Steel production has been heavily curtailed in Europe, where we have also seen massive closures of aluminum plants.

“Despite a difficult environment during the third quarter, Ferroglobe continues to perform well, generating robust sales and healthy profitability. The various initiatives that we have implemented over the past two years have enabled us to perform well during challenging periods and declining prices. We continue to focus on improving our overall competitiveness in the market and optimizing our cost position. The restart of our Polokwane facility will provide us with a competitive source of silicon metal with a location that will provide the flexibility to move production away from plants impacted by burdened energy costs and expand business in new geographies. As we have mentioned in prior earnings calls, we continue reducing our leverage with the objective of further strengthening our balance sheet. During the third quarter we redeemed $60 million of our 9% super senior secured notes, reducing our annual interest expense by over $5 million. We will continue to focus on optimizing our costs to improve the efficiency of our organization,” concluded Dr. Levi.

 

Third Quarter 2022 Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$,000 (unaudited)

 

Quarter
Ended
September 30,
2022

 

Quarter
Ended
June 30,
2022

 

Quarter
Ended
September 30,
2021

 

% CQ/PQ

 

% CYQ/PYQ

 

Nine Months
Ended
September 30,
2022

 

Nine Months
Ended
September 30,
2021

 

%
CY/PY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

593,218

 

 

$

840,808

 

 

$

429,210

 

 

(29

%)

 

38

%

 

$

2,149,291

 

 

$

1,209,137

 

 

78

%

Raw materials and energy consumption for production

 

$

(285,210

)

 

$

(369,749

)

 

$

(295,273

)

 

(23

%)

 

(3

%)

 

$

(995,514

)

 

$

(813,377

)

 

22

%

Operating profit (loss)

 

$

154,424

 

 

$

265,298

 

 

$

11,260

 

 

(42

%)

 

1,271

%

 

$

630,853

 

 

$

(24,502

)

 

2,675

%

Operating margin

 

 

26.0%

 

 

 

31.6%

 

 

 

3%

 

 

 

 

 

 

 

29.4%

 

 

 

(2%

)

 

 

Adjusted net income (loss)
attributable to the parent

 

$

118,264

 

 

$

213,170

 

 

$

(64,214

)

 

(45

%)

 

284

%

 

$

496,737

 

 

$

(79,424

)

 

725

%

Adjusted diluted EPS

 

$

0.64

 

 

$

1.14

 

 

$

(0.36

)

 

 

 

 

 

$

2.66

 

 

$

(0.45

)

 

 

Adjusted EBITDA

 

$

185,293

 

 

$

303,159

 

 

$

37,592

 

 

(39

%)

 

393

%

 

$

729,568

 

 

$

93,747

 

 

678

%

Adjusted EBITDA margin

 

 

31.2%

 

 

 

36.1%

 

 

 

8.8%

 

 

 

 

 

 

 

33.9%

 

 

 

7.8%

 

 

 

Operating cash flow

 

$

54,972

 

 

$

164,818

 

 

$

(34,677

)

 

(67

%)

 

259

%

 

$

285,698

 

 

$

(23,050

)

 

1,339

%

Free cash flow1

 

$

40,141

 

 

$

151,109

 

 

$

(42,845

)

 

(73

%)

 

194

%

 

$

248,033

 

 

$

(39,440

)

 

729

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Working Capital

 

$

717,283

 

 

$

687,345

 

 

$

395,867

 

 

4

%

 

81

%

 

$

717,283

 

 

$

395,867

 

 

81

%

Working Capital as % of Sales2

 

 

30.2%

 

 

 

20.4%

 

 

 

23.1%

 

 

 

 

 

 

 

25.0%

 

 

 

24.6%

 

 

 

Cash and Restricted Cash

 

$

236,789

 

 

$

306,511

 

 

$

95,043

 

 

(23

%)

 

149

%

 

$

236,789

 

 

$

95,043

 

 

149

%

Adjusted Gross Debt3

 

$

431,207

 

 

$

500,472

 

 

$

499,270

 

 

(14

%)

 

(14

%)

 

$

431,207

 

 

$

499,270

 

 

(14

%)

Equity

 

$

700,340

 

 

$

637,710

 

 

$

281,910

 

 

10

%

 

148

%

 

$

700,340

 

 

$

281,910

 

 

148

%

(1)  Free cash flow is calculated as operating cash flow plus investing cash flow
(2)  Working capital based on annualized quarterly sales respectively
(3)  Adjusted gross debt excludes bank borrowings on factoring program and impact of leasing standard IFRS16 at September 30, 2022, June 30, 2022 & September 30, 2021

Sales

In the third quarter of 2022, Ferroglobe reported net sales of $593.2 million, a decrease of 29% compared with the prior quarter and an increase of 38% compared with the third quarter of 2021. The decrease in our third quarter results is primarily attributable to lower volumes across our product portfolio, and lower pricing in our main products. The $248 million decrease in sales over the prior quarter was primarily driven by silicon metal, which accounted for $92 million of the decrease, silicon based alloys, which accounted for $57 million and manganese-based alloys, which accounted for $95 million.

Raw materials and energy consumption for production

Raw materials and energy consumption for production was $285.2 million in the third quarter of 2022 versus $369.8 million in the prior quarter, a decrease of 23%. As a percentage of sales, raw materials and energy consumption for production was 48% in the third quarter of 2022 versus 44% in the prior quarter. This variance is mainly due to the larger energy benefit in France recognized in the second quarter, the increase in the price of energy and inflationary pressure on raw material prices, particularly coal.

Net Income (Loss) Attributable to the Parent

In the third quarter of 2022, net profit attributable to the Parent was $97.6 million, or $0.52 per dilutedshare, compared to a net profit attributable to the Parent of $185.3 million, or $0.98 per diluted share in the second quarter.

Adjusted EBITDA

In the third quarter of 2022, Adjusted EBITDA was $185.3 million, or 31% of sales, a decrease of 5 percentage points compared to adjusted EBITDA of $303.2 million, or 36% of sales in the second quarter of 2022. The decrease in the the third quarter of 2022 Adjusted EBITDA as a percentage of sales is primarily attributable to the decrease in sale volumes and price.

Total Cash

The total cash balance was $236.8 million as of September 30, 2022, down $69.7 million from $306.5 million as of June 30, 2022.

During the third quarter of 2022, we generated positive operating cash flow of $54.9 million, had negative cash flow from investing activities of $14.8 million, and $108.9 million in negative cash flow from financing activities, primarily driven by the $60 million of 9% super senior notes redeemed in July 2022.

Total Working Capital

Total working capital was $717.3 million at September 30, 2022, increasing from $687.3 million at June 30, 2022. The $30.0 million increase in working capital during the quarter was due primarily to a $108.6 million increase in inventories, partially offset by a $84.9 million decrease in accounts receivables. On a relative basis, our working capital as a percentage of sales increased during the third quarter to 30.2%, compared to 20.4% during the prior quarter.

Beatriz García-Cos, Ferroglobe’s Chief Financial Officer, commented, “During the third quarter we continued to follow through on our stated commitment to deleverage the balance sheet with the redemption of our 9% super senior notes that was completed in July. This reduced our adjusted gross debt by $60 million. This was in addition to the $19 million of the senior notes that we purchased in the open market during the second quarter.

“While our end-markets were challenging in the third quarter, we were able to successfully manage our cost to report healthy EBITDA, which remained relatively strong, as well as EBITDA margins, which were the third highest in the Company’s history. The third quarter results highlight that the cost cutting initiatives that we have implemented over the past couple of years enable us to perform well in both challenging markets as well as healthy ones.

“Ferroglobe’s financial condition is strong with $237 million in total cash, with provides us with much flexibility to manage our business” concluded Mrs. García-Cos.

Product Category Highlights

Silicon Metal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter
Ended
September 30,
2022

 

Quarter
Ended
June 30,

2022

 

Change

 

Quarter
Ended
September 30,
2021

 

Change

 

Nine Months
Ended
September 30,
2022

 

Nine Months
Ended
September 30,
2021

 

Change

Shipments in metric tons:

 

50,545

 

 

62,988

 

 

(19.8

)%

 

61,713

 

 

(18.1

)%

 

169,883

 

 

190,311

 

 

(10.7

)%

Average selling price ($/MT):

 

5,220

 

 

5,649

 

 

(7.6

)%

 

2,467

 

 

111.6

%

 

5,489

 

 

2,366

 

 

132.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Silicon Metal Revenue ($,000)

 

263,845

 

 

355,819

 

 

(25.8

)%

 

152,246

 

 

73.3

%

 

932,488

 

 

450,276

 

 

107.1

%

Silicon Metal Adj.EBITDA ($,000)

 

113,151

 

 

175,108

 

 

(35.4

)%

 

11,428

 

 

890.1

%

 

439,920

 

 

39,845

 

 

1004.1

%

Silicon Metal Adj.EBITDA Mgns

 

42.9

%

 

49.2

%

 

 

 

7.5

%

 

 

 

47.2

%

 

8.8

%

 

 

Silicon metal revenue in the third quarter was $263.8 million, a decrease of 25.8% over the prior quarter. The average realized selling price decreased by 7.6%, while total shipments decreased by 19.8%, primarily due to a decline in market demand. Adjusted EBITDA for silicon metal decreased to $113.2 million during the third quarter, a decrease of 35.4% compared with $175.1 million for the prior quarter.

Silicon-Based Alloys

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter
Ended
September 30,
2022

 

Quarter
Ended
June 30,

2022

 

Change

 

Quarter
Ended
September 30,
2021

 

Change

 

Nine Months
Ended
September 30,
2022

 

Nine Months
Ended
September 30,
2021

 

Change

Shipments in metric tons:

 

48,977

 

 

57,658

 

 

(15.1

)%

 

55,863

 

 

(12.3

)%

 

164,230

 

 

182,688

 

 

(10.1

)%

Average selling price ($/MT):

 

3,655

 

 

4,097

 

 

(10.8

)%

 

1,992

 

 

83.5

%

 

3,819

 

 

1,824

 

 

109.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Silicon-based Alloys Revenue ($,000)

 

179,011

 

 

236,225

 

 

(24.2

)%

 

111,279

 

 

60.9

%

 

627,194

 

 

333,223

 

 

88.2

%

Silicon-based Alloys Adj.EBITDA ($,000)

 

59,668

 

 

97,141

 

 

(38.6

)%

 

8,375

 

 

612.5

%

 

235,220

 

 

29,849

 

 

688.0

%

Silicon-based Alloys Adj.EBITDA Mgns

 

33.3

%

 

41.1

%

 

 

 

7.5

%

 

 

 

37.5

%

 

9.0

%

 

 

Silicon-based alloy revenue in the third quarter was $179.0 million, a decrease of 24.2% over the prior quarter. The average realized selling price decreased by 10.8%, due to a decline in demand for ferrosilicons linked to general industry declines in the steel sector. Total shipments of silicon-based alloys decreased 15.1%, driven by lower demand in our foundry business during the quarter due to the broader commodities slowdown. Adjusted EBITDA for the silicon-based alloys portfolio decreased to $59.7 million in the third quarter of 2022, a decrease of 38.6% compared with $97.1 million for the prior quarter.

Manganese-Based Alloys

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter 
Ended
September 30,
2022

 

Quarter 
Ended
June 30,

2022

 

Change

 

Quarter
 Ended
September 30,
2021

 

Change

 

Nine Months Ended
September 30,
2022

 

Nine Months
Ended
September 30,
2021

 

Change

Shipments in metric tons:

 

61,583

 

 

97,007

 

 

(36.5

)%

 

76,454

 

 

(19.5

)%

 

233,672

 

 

217,386

 

 

7.5

%

Average selling price ($/MT):

 

1,584

 

 

1,986

 

 

(20.2

)%

 

1,574

 

 

0.6

%

 

1,860

 

 

1,390

 

 

33.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manganese-based Alloys Revenue ($,000)

 

97,547

 

 

192,656

 

 

(49.4

)%

 

120,339

 

 

(18.9

)%

 

434,630

 

 

302,167

 

 

43.8

%

Manganese-based Alloys Adj.EBITDA ($,000)

 

14,681

 

 

32,871

 

 

(55.3

)%

 

22,494

 

 

(34.7

)%

 

67,923

 

 

48,330

 

 

40.5

%

Manganese-based Alloys Adj.EBITDA Mgns

 

15.1

%

 

17.1

%

 

 

 

18.7

%

 

 

 

15.6

%

 

16.0

%

 

 

Manganese-based alloy revenue in the third quarter was $97.5 million, a decrease of 49.4% over the prior quarter. The average realized selling price decreased by 20.2% and total shipments decreased 36.5%. Shipments declined, as a result of lower demand following an extraordinarily high second quarter, production self-constraint in Spain due to high energy prices, and higher pressure from Asian suppliers. Adjusted EBITDA for the manganese-based alloys portfolio decreased to $14.7 million in the third quarter of 2022, a decrease of 55.3% compared with $32.9 million for the prior quarter.

Russia – Ukraine War

The ongoing war between Russia and Ukraine has disrupted supply chains and caused instability in the global economy, while the United States, United Kingdom and European Union, among other countries, announced sanctions against Russia. The ongoing conflict could result in the imposition of further economic sanctions against Russia. Sanctions imposed on coal and assimilated products such as anthracite and metallurgical coke have obliged Ferroglobe to redirect its sourcing of such products to other origins at a moment of strong market demand, leading to a temporary increase in raw materials prices. The uncertain supply and logistical conditions in Russia have also led Ferroglobe to diversify its sourcing of carbon electrodes. New sourcing was put in place during the course of the quarter allowing Ferroglobe to ensure supply continuity to its operations worldwide while maintaining compliance with applicable sanctions.

Subsequent event

Restart of Polokwane facility        

In October 2022, the company announced the intention to restart its 55,000-ton silicon metal facility in Polokwane, South Africa. The decision to restart the Polokwane facility was made as part of Ferroglobe’s strategic plan to increase its capacity of silicon metal to address strong market demand. The Polokwane plant will enable the Company to add capacity that is lower cost and strategically located, optimizing its asset footprint, and providing flexibility in addressing the volatile energy markets in Europe.

The Polokwane facility provides a lower-cost source of silicon metal that is driven by competitive energy rates, an efficient asset base and a strategic location that can serve customers in Europe, the United States, the Middle East and Asia. Ferroglobe expects to begin production of the three-furnace operation by the end of November 2022, with initial production of approximately 1,150 metric tons per month, gradually ramping up to approximately 3,750 metric tons per month by the end of the second quarter of 2023.

Conference Call

Ferroglobe invites all interested persons to participate on its conference call at 8:30 AM, U.S. Eastern Standard Time on November 16, 2022. Please dial-in at least five minutes prior to the call to register. The call may also be accessed via an audio webcast.

To join via phone:                                                                 
Conference call participants should pre-register using this link:
https://register.vevent.com/register/BI5ce939a3c6fa4ea1b91f9b12ba70c281
Once registered, you will receive the dial-in numbers and a personal PIN, which are required to access the conference call.

To join via webcast:        
A simultaneous audio webcast, and replay will be accessible here:
https://edge.media-server.com/mmc/p/bq7jdch6

About Ferroglobe

Ferroglobe is one of the world’s leading suppliers of silicon metal, silicon- and manganese-based specialty alloys, and other 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

This document may contain summarized, non-audited or non-GAAP financial information. The information contained herein should therefore be considered as a whole and in conjunction with all the public information regarding the Company available, including any other documents released by the Company that may contain more detailed information. Adjusted EBITDA, adjusted EBITDA as a percentage of sales, working capital as a percentage of sales, adjusted EBITDA margin, adjusted net profit, adjusted profit per share, working capital, adjusted gross debt and net debt, are non-IFRS financial metrics that management uses in its decision making. Ferroglobe has included these financial metrics to provide supplemental measures of its performance. The Company believes these metrics are important and useful to investors 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:

Anis Barodawalla
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
September 30,
2022

 

Quarter Ended
June 30,
2022

 

Quarter Ended
September 30,
2021

 

Nine Months
Ended
September 30,
2022

 

Nine Months
Ended
September 30,
2021

Sales

 

$

593,218

 

 

$

840,808

 

 

$

429,210

 

 

$

2,149,291

 

 

$

1,209,137

 

Raw materials and energy consumption for production

 

 

(285,210

)

 

 

(369,749

)

 

 

(295,273

)

 

 

(995,514

)

 

 

(813,377

)

Other operating income

 

 

19,711

 

 

 

26,223

 

 

 

31,447

 

 

 

68,942

 

 

 

70,466

 

Staff costs

 

 

(75,689

)

 

 

(80,704

)

 

 

(50,386

)

 

 

(238,379

)

 

 

(208,849

)

Other operating expense

 

 

(77,954

)

 

 

(130,992

)

 

 

(79,785

)

 

 

(292,122

)

 

 

(209,793

)

Depreciation and amortization charges, operating allowances and write-downs

 

 

(19,719

)

 

 

(20,185

)

 

 

(23,971

)

 

 

(61,012

)

 

 

(72,779

)

Impairment losses

 

 

 

 

 

 

 

 

(363

)

 

 

 

 

 

(363

)

Other gain (loss)

 

 

67

 

 

 

(103

)

 

 

381

 

 

 

(353

)

 

 

1,056

 

Operating profit (loss)

 

 

154,424

 

 

 

265,298

 

 

 

11,260

 

 

 

630,853

 

 

 

(24,502

)

Net finance expense

 

 

(16,630

)

 

 

(12,829

)

 

 

(103,379

)

 

 

(41,914

)

 

 

(130,420

)

Exchange differences

 

 

(1,770

)

 

 

(7,882

)

 

 

(6,180

)

 

 

(14,045

)

 

 

(12,257

)

Profit (loss) before tax

 

 

136,024

 

 

 

244,587

 

 

 

(98,299

)

 

 

574,894

 

 

 

(167,179

)

Income tax benefit (loss)

 

 

(37,184

)

 

 

(59,529

)

 

 

680

 

 

 

(140,207

)

 

 

1,774

 

Profit (loss) for the period

 

 

98,840

 

 

 

185,058

 

 

 

(97,619

)

 

 

434,687

 

 

 

(165,405

)

Profit (loss) attributable to non-controlling interest

 

 

(1,212

)

 

 

265

 

 

 

1,023

 

 

 

(570

)

 

 

3,338

 

Profit (loss) attributable to the parent

 

$

97,628

 

 

$

185,323

 

 

$

(96,596

)

 

$

434,117

 

 

$

(162,067

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

174,143

 

 

$

285,483

 

 

$

35,231

 

 

$

691,865

 

 

$

48,277

 

Adjusted EBITDA

 

$

185,293

 

 

$

303,159

 

 

$

37,592

 

 

$

729,568

 

 

$

93,747

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

187,424

 

 

 

187,441

 

 

 

179,849

 

 

 

187,454

 

 

 

172,852

 

Diluted

 

 

188,850

 

 

 

188,538

 

 

 

179,849

 

 

 

188,804

 

 

 

172,852

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit (loss) per ordinary share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.52

 

 

$

0.99

 

 

$

(0.54

)

 

$

2.32

 

 

$

(0.94

)

Diluted

 

$

0.52

 

 

$

0.98

 

 

$

(0.54

)

 

$

2.30

 

 

$

(0.94

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Ferroglobe PLC and Subsidiaries
Unaudited Condensed Consolidated Statement of Financial Position
(in thousands of U.S. dollars)

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

December 31,

 

    

2022

    

2022

    

2021

 

 

 

 

 

 

 

 

 

 

ASSETS

Non-current assets

 

 

 

 

 

 

 

 

 

Goodwill

 

$

29,702

 

$

29,702

 

$

29,702

Other intangible assets

 

 

97,467

 

 

94,866

 

 

100,642

Property, plant and equipment

 

 

511,256

 

 

528,198

 

 

554,914

Other non-current financial assets

 

 

3,904

 

 

3,920

 

 

4,091

Deferred tax assets

 

 

158

 

 

124

 

 

7,010

Non-current receivables from related parties

 

 

1,462

 

 

1,558

 

 

1,699

Other non-current assets

 

 

17,072

 

 

17,818

 

 

18,734

Non-current restricted cash and cash equivalents

 

 

1,950

 

 

2,077

 

 

2,272

Total non-current assets

 

 

662,971

 

 

678,263

 

 

719,064

Current assets

 

 

 

 

 

 

 

 

 

Inventories

 

 

511,557

 

 

403,004

 

 

289,797

Trade and other receivables

 

 

413,722

 

 

498,619

 

 

381,073

Current receivables from related parties

 

 

2,445

 

 

2,605

 

 

2,841

Current income tax assets

 

 

1,155

 

 

2,314

 

 

7,660

Other current financial assets

 

 

2

 

 

203

 

 

104

Other current assets

 

 

35,581

 

 

15,518

 

 

8,408

Current restricted cash and cash equivalents

 

 

 

 

 

 

Cash and cash equivalents

 

 

234,839

 

 

304,434

 

 

114,391

Total current assets

 

 

1,199,301

 

 

1,226,697

 

 

804,274

Total assets

 

$

1,862,272

 

$

1,904,960

 

$

1,523,338

 

 

 

 

 

 

 

 

 

 

EQUITY AND LIABILITIES

Equity

 

$

700,340

 

$

637,710

 

$

320,031

Non-current liabilities

 

 

 

 

 

 

 

 

 

Deferred income

 

 

23,130

 

 

48,961

 

 

895

Provisions

 

 

53,487

 

 

55,771

 

 

60,958

Bank borrowings

 

 

2,534

 

 

2,922

 

 

3,670

Lease liabilities

 

 

9,181

 

 

9,514

 

 

9,968

Debt instruments

 

 

330,990

 

 

385,911

 

 

404,938

Other financial liabilities (1)

 

 

34,695

 

 

37,020

 

 

4,549

Other Obligations (2)

 

 

43,009

 

 

43,232

 

 

38,082

Other non-current liabilities (2)

 

 

 

 

 

 

1,476

Deferred tax liabilities

 

 

34,461

 

 

41,228

 

 

25,145

Total non-current liabilities

 

 

531,487

 

 

624,559

 

 

549,681

Current liabilities

 

 

 

 

 

 

 

 

 

Provisions

 

 

121,826

 

 

95,300

 

 

137,625

Bank borrowings

 

 

68,446

 

 

96,412

 

 

95,297

Lease liabilities

 

 

7,800

 

 

7,342

 

 

8,390

Debt instruments

 

 

5,146

 

 

15,075

 

 

35,359

Other financial liabilities (1)

 

 

56,078

 

 

57,653

 

 

62,464

Payables to related parties

 

 

848

 

 

9,605

 

 

9,545

Trade and other payables

 

 

207,996

 

 

214,278

 

 

206,000

Current income tax liabilities

 

 

70,564

 

 

43,193

 

 

1,775

Other Obligations (2)

 

 

7,171

 

 

16,469

 

 

22,843

Other current liabilities (2)

 

 

84,570

 

 

87,364

 

 

74,328

Total current liabilities

 

 

630,445

 

 

642,691

 

 

653,626

Total equity and liabilities

 

$

1,862,272

 

$

1,904,960

 

$

1,523,338

(1)  On January 25, 2022, the Ministry opened a hearing to decide on reimbursement of the loan. The company presented its allegations on February 15, 2022. Based on those allegations, the reimbursement procedure has been suspended and a new final report is expected to be made by the Ministry by the end of 2022 ending the administrative procedure and establishing the definitive amount of the partial reimbursement to be made. However, for accounting purposes the entire loan was considered short-term
(2)  In 2021 we disaggregated “Other liabilities” into an additional line to the balance sheet “Other obligations“ to separately present certain contractual obligations whose nature and function differs from other items presented in the “Other liabilities line”, so as to allow a better understanding of the Company´s financial position.

 

Ferroglobe PLC and Subsidiaries
Unaudited Condensed Consolidated Statement of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended
September 30,
2022

 

Quarter Ended
June 30,

2022

 

Quarter Ended
September 30,
2021

 

Nine Months
Ended
September 30,
2022

 

Nine Months
Ended
September 30,
2021

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit (loss) for the period

 

$

98,840

 

 

$

185,058

 

 

$

(97,619

)

 

$

434,687

 

 

$

(165,405

)

Adjustments to reconcile net (loss) profit
to net cash used by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax (benefit) expense

 

 

37,184

 

 

 

59,529

 

 

 

(680

)

 

 

140,207

 

 

 

(1,774

)

Depreciation and amortization charges,
operating allowances and write-downs

 

 

19,719

 

 

 

20,185

 

 

 

23,971

 

 

 

61,012

 

 

 

72,779

 

Net finance expense

 

 

16,630

 

 

 

12,829

 

 

 

103,379

 

 

 

41,914

 

 

 

130,420

 

Exchange differences

 

 

1,770

 

 

 

7,882

 

 

 

6,180

 

 

 

14,045

 

 

 

12,257

 

Impairment losses

 

 

 

 

 

 

 

 

363

 

 

 

 

 

 

363

 

Net loss (gain) due to changes in the value of asset

 

 

(124

)

 

 

(10

)

 

 

(424

)

 

 

(140

)

 

 

(688

)

Gain on disposal of non-current assets

 

 

142

 

 

 

 

 

 

 

 

 

444

 

 

 

(351

)

Share-based compensation

 

 

1,118

 

 

 

970

 

 

 

1,269

 

 

 

3,895

 

 

 

2,163

 

Other adjustments

 

 

(85

)

 

 

112

 

 

 

43

 

 

 

48

 

 

 

(17

)

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in inventories

 

 

(129,210

)

 

 

(59,568

)

 

 

(51,835

)

 

 

(262,389

)

 

 

(49,159

)

(Increase) decrease in trade receivables

 

 

60,654

 

 

 

(25,963

)

 

 

(27,683

)

 

 

(87,076

)

 

 

(78,000

)

Increase (decrease) in trade payables

 

 

1,656

 

 

 

(10,959

)

 

 

9,138

 

 

 

30,770

 

 

 

51,474

 

Other

 

 

(40,841

)

 

 

5,654

 

 

 

(1,138

)

 

 

(47,650

)

 

 

3,764

 

Income taxes paid

 

 

(12,481

)

 

 

(30,901

)

 

 

359

 

 

 

(44,069

)

 

 

(876

)

Net cash provided (used) by operating activities

 

 

54,972

 

 

 

164,818

 

 

 

(34,677

)

 

 

285,698

 

 

 

(23,050

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and finance income received

 

 

1,055

 

 

 

140

 

 

 

21

 

 

 

1,263

 

 

 

184

 

Payments due to investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other intangible assets(1)

 

 

(229

)

 

 

 

 

 

 

 

 

(229

)

 

 

 

Property, plant and equipment

 

 

(15,657

)

 

 

(13,855

)

 

 

(8,189

)

 

 

(38,705

)

 

 

(17,117

)

Other

 

 

 

 

 

6

 

 

 

 

 

 

6

 

 

 

 

Disposals:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-current assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

543

 

Net cash (used) provided by investing activities

 

 

(14,831

)

 

 

(13,709

)

 

 

(8,168

)

 

 

(37,665

)

 

 

(16,390

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment for debt and equity issuance costs

 

 

(693

)

 

 

(100

)

 

 

(26,064

)

 

 

(793

)

 

 

(43,755

)

Proceeds from equity issuance

 

 

 

 

 

 

 

 

40,000

 

 

 

 

 

 

40,000

 

Proceeds from debt issuance

 

 

 

 

 

 

 

 

20,000

 

 

 

(4,943

)

 

 

60,000

 

Increase/(decrease) in bank borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings

 

 

193,502

 

 

 

301,360

 

 

 

159,861

 

 

 

739,026

 

 

 

437,496

 

Payments

 

 

(218,593

)

 

 

(292,253

)

 

 

(158,118

)

 

 

(748,473

)

 

 

(460,565

)

Amounts paid due to leases

 

 

(2,412

)

 

 

(2,277

)

 

 

(2,602

)

 

 

(7,207

)

 

 

(8,615

)

Other amounts received/(paid) due to financing activities

 

 

(60,655

)

 

 

(19,119

)

 

 

 

 

 

(41,476

)

 

 

 

Interest paid

 

 

(20,078

)

 

 

(2,376

)

 

 

(1,125

)

 

 

(57,253

)

 

 

(21,473

)

Net cash (used) provided by financing activities

 

 

(108,929

)

 

 

(14,765

)

 

 

31,952

 

 

 

(121,119

)

 

 

3,088

 

Total net cash flows for the period

 

 

(68,788

)

 

 

136,344

 

 

 

(10,893

)

 

 

126,914

 

 

 

(36,352

)

Beginning balance of cash and cash equivalents

 

 

306,511

 

 

 

176,022

 

 

 

106,089

 

 

 

116,663

 

 

 

131,557

 

Exchange differences on cash and
cash equivalents in foreign currencies

 

 

(934

)

 

 

(5,855

)

 

 

(153

)

 

 

(6,788

)

 

 

(162

)

Ending balance of cash and cash equivalents

 

$

236,789

 

 

$

306,511

 

 

$

95,043

 

 

$

236,789

 

 

$

95,043

 

Cash from continuing operations

 

 

234,839

 

 

 

304,434

 

 

 

89,047

 

 

 

234,839

 

 

 

89,047

 

Current/Non-current restricted cash and cash equivalents

 

 

1,950

 

 

 

2,077

 

 

 

5,996

 

 

 

1,950

 

 

 

5,996

 

Cash and restricted cash in the statement of financial position

 

$

236,789

 

 

$

306,511

 

 

$

95,043

 

 

$

236,789

 

 

$

95,043

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA ($,000):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended
September 30,
2022

 

Quarter Ended
June 30,

2022

 

Quarter Ended
September 30,
2021

 

Nine Months
Ended
September 30,
2022

 

Nine Months
Ended
September 30,
2021

Profit (loss) attributable to the parent

 

$

97,628

 

$

185,323

 

 

$

(96,596

)

 

$

434,117

 

$

(162,067

)

Profit (loss) attributable to non-controlling interest

 

 

1,212

 

 

(265

)

 

 

(1,023

)

 

 

570

 

 

(3,338

)

Income tax (benefit) expense

 

 

37,184

 

 

59,529

 

 

 

(680

)

 

 

140,207

 

 

(1,774

)

Net finance expense

 

 

16,630

 

 

12,829

 

 

 

103,379

 

 

 

41,914

 

 

130,420

 

Exchange differences

 

 

1,770

 

 

7,882

 

 

 

6,180

 

 

 

14,045

 

 

12,257

 

Depreciation and amortization charges, operating allowances and write-downs

 

 

19,719

 

 

20,185

 

 

 

23,971

 

 

 

61,012

 

 

72,779

 

EBITDA

 

 

174,143

 

 

285,483

 

 

 

35,231

 

 

 

691,865

 

 

48,277

 

Impairment

 

 

 

 

 

 

 

363

 

 

 

 

 

363

 

Restructuring and termination costs

 

 

 

 

3,406

 

 

 

1,313

 

 

 

9,315

 

 

44,422

 

New strategy implementation

 

 

7,354

 

 

14,270

 

 

 

 

 

 

24,592

 

 

 

Pension Plan buyout

 

 

 

 

 

 

 

685

 

 

 

 

 

685

 

Subactivity

 

 

3,796

 

 

 

 

 

 

 

 

3,796

 

 

 

Adjusted EBITDA

 

$

185,293

 

$

303,159

 

 

$

37,592

 

 

$

729,568

 

$

93,747

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted profit attributable to Ferroglobe ($,000):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Quarter  Ended
September 30,
2022

 

Quarter Ended
June 30,

2022

 

Quarter Ended
September 30,
2021

 

Nine Months
Ended
September 30,
2022

 

Nine Months
Ended
September 30,
2021

Profit (loss) attributable to the parent

 

$

97,628

 

$

185,323

 

$

(96,596

)

 

$

434,117

 

$

(162,067

)

Tax rate adjustment

 

 

11,584

 

 

13,498

 

 

30,776

 

 

 

32,012

 

 

51,723

 

Impairment

 

 

 

 

 

 

247

 

 

 

 

 

247

 

Restructuring and termination costs

 

 

 

 

2,765

 

 

893

 

 

 

7,562

 

 

30,207

 

New strategy implementation

 

 

5,970

 

 

11,584

 

 

 

 

 

19,964

 

 

 

Pension Plan buyout

 

 

 

 

 

 

466

 

 

 

 

 

466

 

Subactivity

 

 

3,082

 

 

 

 

 

 

 

3,082

 

 

 

Adjusted profit (loss) attributable to the parent

 

$

118,264

 

$

213,170

 

$

(64,214

)

 

$

496,737

 

$

(79,424

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted profit per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended
September 30,
2022

 

Quarter Ended
June 30,

2022

 

Quarter Ended
September 30,
2021

 

Nine Months
Ended
September 30,
2022

 

Nine Months
Ended
September 30,
2021

Diluted profit (loss) per ordinary share

 

$

0.52

 

$

0.98

 

$

(0.54

)

 

$

2.30

 

$

(0.94

)

Tax rate adjustment

 

 

0.06

 

 

0.08

 

 

0.18

 

 

 

0.18

 

 

0.31

 

Restructuring and termination costs

 

 

0.01

 

 

0.02

 

 

0.00

 

 

 

0.04

 

 

0.18

 

New strategy implementation

 

 

0.03

 

 

0.06

 

 

 

 

 

0.12

 

 

 

Subactivity

 

 

0.02

 

 

 

 

 

 

 

0.02

 

 

 

Adjusted diluted profit (loss) per ordinary share

 

$

0.64

 

$

1.14

 

$

(0.36

)

 

$

2.66

 

$

(0.45

)