Ferroglobe(GSM) - 2022 Q4 - Annual Report

Sales Performance - Sales increased by $819,008 thousand, or 46.0%, from$ 1,778,908 thousand in 2021 to $2,597,916 thousand in 2022, primarily due to higher average realized prices despite a decrease in tonnes sold[369]. - Silicon metal sales revenue rose by 75%, with average selling prices increasing by 112.3% to$ 5,332/MT in 2022, while total shipments decreased by 17.6% due to weak demand in Europe[370]. - Silicon-based alloys sales revenue increased by 50.9%, with average selling prices rising by 79.5% to $3,694/MT in 2022, and total shipments decreased by 15.9% driven by weak demand from steel manufacturers[371]. - Manganese-based alloys sales revenue increased by 12%, with average selling prices rising by 19.2% to$ 1,778/MT in 2022, while total shipments decreased by 6% due to production adjustments in Spain[372]. - Sales increased by $301,181 thousand, or 81.4%, from$ 370,109 thousand in 2021 to $671,290 thousand in 2022, primarily due to higher average realized selling prices and the restart of the Selma facility[389]. - Sales in Europe - Manganese increased by$ 224,853 thousand, or 47.2%, from $476,287 thousand in 2021 to$ 701,140 thousand in 2022, driven by a 19.2% increase in average selling prices[406]. - Sales in South Africa increased by $4,733 thousand, or 37.6%, from$ 12,604 thousand in 2021 to $17,337 thousand in 2022, driven by improved demand and market conditions[430]. - Sales in the South Africa Silicon Alloys segment increased by$ 17,671 thousand, or 16.9%, from $104,591 thousand in 2021 to$ 122,262 thousand in 2022[438]. - Sales in other segments increased by $37,992 thousand, or 87.2%, from$ 43,568 thousand in 2021 to $81,560 thousand in 2022, primarily due to increased selling prices[446]. Operating Income and Expenses - Other operating income increased by$ 37,271 thousand, or 33.9%, to $147,356 thousand in 2022, mainly due to energy compensation received from the French energy provider EDF[374]. - Other operating income increased by$ 1,375 thousand, or 27.0%, from $5,089 thousand in 2021 to$ 6,464 thousand in 2022, mainly due to gains from CO2 emission rights and increased scrap sales[391]. - Other operating expenses rose by $11,486 thousand, or 51.7%, from$ 22,222 thousand in 2021 to $33,708 thousand in 2022, primarily due to inflationary pressures and the Selma facility restart[393]. - Other operating income in Europe - Silicon Metals increased by$ 27,427 thousand, or 56.2%, from $48,828 thousand in 2021 to$ 76,255 thousand in 2022, primarily due to energy compensation received in France[416]. - Other operating income in South Africa decreased by $122 thousand, or 43.9%, from$ 278 thousand in 2021 to $156 thousand in 2022[432]. - Other operating income in the South Africa Silicon Alloys segment decreased by$ 419 thousand, or 86.4%, from $485 thousand in 2021 to$ 66 thousand in 2022[440]. Costs and Expenses - Raw materials and energy consumption for production increased by $100,190 thousand, or 8.5%, to$ 1,285,086 thousand in 2022, with raw materials and energy consumption as a percentage of sales at 49% compared to 67% in 2021[373]. - Raw materials and energy consumption for production rose by $39,892 thousand, or 15.0%, from$ 265,653 thousand in 2021 to $305,545 thousand in 2022, driven by higher raw material costs[390]. - Staff costs rose by$ 33,893 thousand, or 12.1%, to $314,810 thousand in 2022, primarily due to the restart of the facility in Selma, Alabama[375]. - Staff costs increased by$ 10,215 thousand, or 20.0%, from $51,163 thousand in 2021 to$ 61,378 thousand in 2022, attributed to the Selma facility start-up and higher medical insurance expenses[392]. - Staff costs in Europe - Silicon Alloys increased by $7,788 thousand, or 18.2%, from$ 42,679 thousand in 2021 to $50,467 thousand in 2022, driven by higher variable remuneration linked to improved results[425]. - Staff costs in South Africa increased by$ 194 thousand, or 12.6%, from $1,542 thousand in 2021 to$ 1,736 thousand in 2022, primarily due to a higher number of employees following the restart of the Polokwane facility[433]. - Other operating expenses rose by $164,750 thousand, or 124.8%, from$ 132,059 thousand in 2020 to $296,809 thousand in 2021, mainly driven by CO2 emissions provisions[465]. - Staff costs increased by$ 66,135 thousand, or 30.8%, from $214,782 thousand in 2020 to$ 280,917 thousand in 2021, primarily due to restructuring provisions and higher variable considerations[464]. Financial Performance - Finance costs decreased by $88,174 thousand, or 59.1%, to$ 61,015 thousand in 2022, primarily due to an accounting charge related to Senior Notes refinancing in 2021[384]. - Finance costs increased by $82,221 thousand, or 122.8%, from$ 66,968 thousand in 2020 to $149,189 thousand in 2021, primarily due to an accounting charge related to Senior Notes refinancing[471]. - Income tax expense increased by$ 152,545 thousand, from an income tax benefit of $4,562 thousand in 2021 to an expense of$ 147,983 thousand in 2022, primarily due to taxes recorded in the U.S., France, and Canada[386]. - Income tax expense variation amounted to $26,501 thousand, or 120.8%, from an expense of$ 21,939 thousand in 2020 to a benefit of $4,562 thousand in 2021, mainly due to tax assets recorded in relation to a carryback credit[476]. Impairment and Depreciation - Impairment losses increased by$ 32,846 thousand, from a loss of $376 thousand in 2021 to a loss of$ 33,222 thousand in 2022, related to facilities in Spain and Norway[412]. - Impairment loss rose by $25,573 thousand, from a loss of$ 455 thousand in 2021 to a loss of $26,028 thousand in 2022, with significant impairments recognized at facilities in France and Spain[428]. - Impairment losses in other segments increased by$ 3,784 thousand, or 218.7%, from $1,730 thousand in 2021 to$ 5,514 thousand in 2022, mainly due to the solar-grade silicon metal project in Spain[452]. - Depreciation and amortization charges decreased by $6,781 thousand, or 16.7%, from$ 40,489 thousand in 2021 to $33,708 thousand in 2022, due to assets becoming fully depreciated[396]. - Depreciation and amortization charges in the South Africa Silicon Alloys segment increased by$ 743 thousand, or 16.4%, from $4,535 thousand in 2021 to$ 5,278 thousand in 2022, reflecting higher depreciation in leases[443]. - Depreciation and amortization charges decreased by $10,861 thousand, or 10.0%, from$ 108,189 thousand in 2020 to $97,328 thousand in 2021, due to a significant number of assets becoming fully depreciated[466]. - Impairment losses decreased by$ 73,481 thousand, or 100.2%, from a loss of $73,344 thousand in 2020 to a gain of$ 137 thousand in 2021, reflecting a reversal of previous impairments[467]. Liquidity and Financing - The company’s primary sources of long-term liquidity include senior secured notes totaling $345,058 thousand at an interest rate of 9.375%, due on June 30, 2025[550]. - In 2022, the company signed a$ 100 million ABL Revolver, which is currently undrawn, to enhance liquidity[550]. - The company experienced significant inflationary pressures in 2022, impacting costs, but management believes the impact was not material to operations in 2021 and 2020[547]. Segment Reporting - The company revised its operating segments to reflect current management reporting, now reporting results in five segments: North America - Silicon Metals, North America - Silicon Alloys, Europe - Manganese, Europe - Silicon Metals, and Europe - Silicon Alloys[387].