Eramet (ERA) H1 2024 earnings summary

Executive summary

• Strong operational performance in H1 2024, with significant production growth in Gabon and Indonesia, despite a challenging pricing environment and societal unrest impacting nickel operations.

• Inauguration and commissioning of the first lithium plant in Argentina, with production starting in November 2024 and full capacity targeted at 24,000 t-LCE/year.

• Robust financial structure maintained, including a €500 million sustainability-linked bond issue and extended debt maturity.

• Negative contribution from SLN, fully financed by the French State, with societal unrest in New Caledonia impacting operations.

• Deployment of a new CSR roadmap, including improved employee social protection, biodiversity commitments, and decarbonization targets.

Financial highlights

• Adjusted EBITDA of €247 million in H1 2024, including a negative €109 million from SLN.

• Net income group share was -€41 million, with €72 million negative from SLN.

• Net debt increased by €97 million to €711 million, leverage at 1.0x.

• Free cash flow was significantly negative at -€521 million, mainly due to SLN and growth CapEx.

• Robust liquidity position at €2.8 billion.

Outlook and guidance

• Manganese ore production guidance for 2024: 7–7.5 million tons (up from 6.6 million in 2023).

• Weda Bay nickel ore production guidance: 40–42 million tons (up from 33 million in 2023).

• CapEx guidance lowered to €550–600 million for 2024, mainly due to delayed second lithium plant construction.

• Illustrative Adjusted EBITDA for 2024 expected between €1.2–1.3 billion, driven by higher manganese prices and positive seasonality.

• Lithium carbonate production to start in November 2024, with initial output of ~1 kt-LCE.