Ferroglobe(GSM) - 2025 Q1 - Quarterly Report

Q1 2025 Financial & Operational Highlights This section provides an overview of Ferroglobe's financial and operational performance in Q1 2025, highlighting key results and management's perspective Overall Performance Summary Ferroglobe reported a challenging first quarter with a net loss of $66.5 million and a negative Adjusted EBITDA of $(26.8) million, which was in line with the company's budget Q1 2025 Financial Highlights | Financial Highlights | Q1 2025 | Q4 2024 | % Q/Q | Q1 2024 | % Y/Y | | :--- | :--- | :--- | :--- | :--- | :--- | | Sales ($M) | $307.2 | $367.5 | (16.4)% | $391.9 | (21.6)% | | Net loss attributable to the parent ($M) | $(66.5) | $(28.1) | (136.3)% | $(2.0) | (3184.7)% | | Adj. EBITDA ($M) | $(26.8) | $9.8 | (372.2)% | $25.8 | (203.9)% | | Adjusted diluted EPS ($) | $(0.20) | $0.03 | (849.2)% | $(0.00) | (4872.9)% | | Operating cash flow ($M) | $19.4 | $32.1 | (39.6)% | $198.0 | (90.2)% | | Free cash flow ($M) | $5.1 | $14.1 | (64.2)% | $179.8 | (97.2)% | - The company is maintaining its full-year 2025 Adjusted EBITDA guidance of $100-$170 million[7][47][85] - CEO Dr. Marco Levi stated that the negative first-quarter adjusted EBITDA was in line with the budget and anticipates significant improvement from the second quarter forward, believing the market is at or near a trough[8][9] - Key operational achievements include generating $5.1 million of free cash flow, receiving a favorable final decision in the U.S. ferrosilicon case, increasing the quarterly dividend by 8%, and repurchasing 720,008 shares[11] Consolidated Sales Analysis In Q1 2025, Ferroglobe's sales were $307.2 million, a significant decrease of 16.4% quarter-over-quarter and 21.6% year-over-year - Q1 2025 sales of $307.2 million were down 16.4% from Q4 2024 and 21.6% from Q1 2024[10] - Compared to the prior quarter, sales of silicon metal and manganese-based alloys declined by $56.7 million and $4.0 million, respectively, while silicon-based alloys sales increased by $5.8 million[12] Segment Performance Analysis This section details the financial performance of Ferroglobe's key product segments, including Silicon Metal, Silicon-Based Alloys, and Manganese-Based Alloys, for Q1 2025 Silicon Metal The Silicon Metal segment experienced a significant downturn in Q1 2025, with revenue falling 35.2% quarter-over-quarter to $104.6 million Silicon Metal Performance (Q1 2025 vs. Q4 2024) | Metric | Q1 2025 | Q4 2024 | % Q/Q | | :--- | :--- | :--- | :--- | | Shipments (MT) | 36,308 | 49,797 | (27.1)% | | Avg. Selling Price ($/MT) | $2,881 | $3,240 | (11.1)% | | Revenue ($'000) | $104,603 | $161,342 | (35.2)% | | Adj. EBITDA ($'000) | $(15,447) | $16,849 | (191.7)% | | Adj. EBITDA Margin | (14.8)% | 10.4% | - | - The decrease in Adjusted EBITDA margin was attributed to lower prices, volume declines, reduced fixed cost absorption, and higher energy costs[13] - Outlook: Management believes Q1 likely marked the trough for the year, expects Q2 volumes to increase significantly, and anticipates benefits from the U.S. silicon metal trade case and EU safeguards[58] Silicon-Based Alloys Silicon-based alloy revenue rose 6.8% to $90.9 million in Q1 2025, driven by an 8.7% increase in shipment volumes due to higher demand in the US Silicon-Based Alloys Performance (Q1 2025 vs. Q4 2024) | Metric | Q1 2025 | Q4 2024 | % Q/Q | | :--- | :--- | :--- | :--- | | Shipments (MT) | 42,864 | 39,417 | 8.7% | | Avg. Selling Price ($/MT) | $2,120 | $2,159 | (1.8)% | | Revenue ($'000) | $90,872 | $85,101 | 6.8% | | Adj. EBITDA ($'000) | $2,414 | $3,093 | (22.0)% | | Adj. EBITDA Margin | 2.7% | 3.6% | - | - Outlook: The company is seeing initial positive impacts from trade cases, with U.S. FeSi index prices increasing 17% through April, and expects market improvement to accelerate with potential EU safeguard implementation[63] Manganese-Based Alloys Manganese-based alloy revenue decreased by 5.1% to $74.5 million in Q1 2025, as a 4.4% drop in average selling prices overshadowed nearly flat shipment volumes Manganese-Based Alloys Performance (Q1 2025 vs. Q4 2024) | Metric | Q1 2025 | Q4 2024 | % Q/Q | | :--- | :--- | :--- | :--- | | Shipments (MT) | 67,229 | 67,712 | (0.7)% | | Avg. Selling Price ($/MT) | $1,108 | $1,159 | (4.4)% | | Revenue ($'000) | $74,490 | $78,478 | (5.1)% | | Adj. EBITDA ($'000) | $(5,574) | $7,091 | (178.6)% | | Adj. EBITDA Margin | (7.5)% | 9.0% | - | - The decrease in Adjusted EBITDA margin was mainly due to higher energy costs and idling in France[15] - Outlook: The company expects a meaningful increase in volumes in the second quarter and believes affirmed EU safeguards should benefit pricing and help local producers[68] Cost and Profitability Analysis This section analyzes Ferroglobe's cost structure and profitability metrics, including raw materials, energy consumption, net loss, and Adjusted EBITDA for Q1 2025 Raw Materials and Energy Consumption Raw materials and energy consumption for production decreased 5.0% to $238.3 million in Q1 2025, but increased as a percentage of sales to 77.6% - Raw materials and energy consumption as a percentage of sales was 77.6% in Q1 2025, up from 68.2% in Q4 2024[17] - The increase in costs as a percentage of sales was driven by lower pricing and higher energy costs[17] Net Loss and Adjusted EBITDA In Q1 2025, Ferroglobe reported a net loss attributable to the parent of $66.5 million, or $(0.36) per diluted share, with Adjusted EBITDA turning negative to $(26.8) million - Q1 2025 net loss attributable to the parent was $(66.5) million, or $(0.36) per diluted share[18] - Adjusted EBITDA for Q1 2025 was $(26.8) million, compared to $9.8 million in Q4 2024, with the decrease mainly driven by lower pricing and higher energy costs[19] - Adjusted diluted earnings per share was $(0.20) for Q1 2025, compared with $0.03 in the prior quarter[18] Financial Position and Cash Flow This section reviews Ferroglobe's balance sheet, working capital management, and cash flow generation, including capital returns to shareholders, for Q1 2025 Balance Sheet and Working Capital As of March 31, 2025, Ferroglobe maintained a net cash position of $19.2 million, with total working capital decreasing by $25.1 million to $435.7 million Key Balance Sheet Metrics (as of March 31, 2025) | ($ in millions) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :--- | :--- | :--- | :--- | | Total Cash | $129.6 | $133.3 | $159.8 | | Adjusted Gross Debt | $110.4 | $94.4 | $80.8 | | Net Cash | $19.2 | $38.9 | $79.0 | | Total Working Capital | $435.7 | $460.8 | $487.5 | - The $25.1 million decrease in working capital was due to a $32.3 million decrease in inventories and a $17.7 million increase in trade and other payables, partially offset by increases in receivables[22] - CFO Beatriz García-Cos noted that the company achieved about 50% of its full-year working capital reduction target in Q1 and expects a modest increase in the next two quarters as production ramps up, followed by a meaningful reduction in Q4[23] Cash Flow and Capital Returns Despite the challenging market, Ferroglobe generated positive free cash flow of $5.1 million in Q1 2025 and continued its capital return program - Generated positive free cash flow of $5.1 million, calculated from $19.4 million in operating cash flow less $14.3 million in capital expenditures[8][81] - During Q1, the company repurchased 720,008 shares at an average price of $3.75 per share for a total of $2.7 million[24] - A quarterly cash dividend of $0.014 per share was paid on March 26, 2025, with the next dividend of the same amount to be paid on June 26, 2025[24] Outlook and Guidance This section outlines Ferroglobe's forward-looking statements, including its full-year 2025 Adjusted EBITDA guidance and the factors influencing its optimistic market outlook Company Outlook Ferroglobe maintains its full-year 2025 Adjusted EBITDA guidance of $100-$170 million, expecting significant performance improvement from Q2 onwards due to market trough and trade actions - The company is maintaining its 2025 Adjusted EBITDA guidance of $100-$170 million[7][85] - The optimistic outlook is driven by the belief that the market is at or near a trough, combined with supportive trade actions[9] - Key trade actions include a favorable final determination in the U.S. ferrosilicon case, a newly filed petition by U.S. silicon metal producers, and expected EU safeguard measures covering all main products, which should benefit the company in the second half of the year[9][51] Appendix: Financial Statements and Reconciliations This appendix provides detailed unaudited condensed consolidated financial statements and reconciliations of non-IFRS financial measures to their IFRS equivalents Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2025, including the Income Statement, Statement of Financial Position, and Statement of Cash Flows - The Unaudited Condensed Consolidated Income Statement details revenues, costs, and the resulting net loss for the period[35][36] - The Unaudited Condensed Consolidated Statement of Financial Position provides a snapshot of the company's assets, liabilities, and equity at the end of the quarter[37][38] - The Unaudited Condensed Consolidated Statement of Cash Flows outlines the cash movements from operating, investing, and financing activities during the quarter[39][40] Non-IFRS Reconciliations This section provides reconciliations for non-IFRS financial measures used by management, such as Adjusted EBITDA, Adjusted Profit, and Adjusted Diluted EPS, to their nearest IFRS equivalents Reconciliation of Net Loss to Adjusted EBITDA (Q1 2025, $ in thousands) | Description | Amount | | :--- | :--- | | Loss attributable to the parent | $(66,482) | | Loss attributable to non-controlling interest | $(416) | | Income tax expense | $625 | | Finance income | $(873) | | Finance costs | $4,555 | | Depreciation and amortization | $17,520 | | EBITDA | $(45,071) | | Exchange differences | $6,914 | | Impairment (gain) loss | $(268) | | New strategy implementation | $682 | | PPA Energy | $2,768 | | Fines inventory adjustment | $8,172 | | Adjusted EBITDA | $(26,803) | Reconciliation of Diluted EPS to Adjusted Diluted EPS (Q1 2025) | Description | Amount ($) | | :--- | :--- | | Diluted (loss) per ordinary share | $(0.36) | | Tax rate adjustment | $0.11 | | Impairment (gain) loss | $(0.00) | | New strategy implementation | $0.00 | | PPA Energy | $0.01 | | Fines inventory adjustment | $0.03 | | Adjusted diluted (loss) per ordinary share | $(0.20) |