Ferroglobe (GSM) Q2 2024 earnings summary

Executive summary

• Achieved strong Q2 2024 results with sales of $451 million, up 15% sequentially, and adjusted EBITDA of $58 million, a 124% increase, driven by higher volumes and pricing, especially in silicon metal and manganese alloys.

• U.S. Department of Commerce imposed preliminary antidumping and countervailing duties on Russian ferrosilicon imports, expected to benefit market share and pricing in 2025.

• Coreshell EV battery technology advanced, with significant milestones in silicon-rich anode development and pilot-scale production planned for OEM testing in early 2025.

• French operations restarted, contributing to volume growth in silicon metal and manganese-based alloys.

• Enhanced capital return policy with quarterly dividend payments and an approved share buyback program.

Financial highlights

• Adjusted EBITDA margin expanded to 13% from 7% in Q1 2024, with net financial expenses down 31% to $5 million due to debt redemption.

• Operating cash flow was $2 million and free cash flow was negative $19.9 million, mainly due to inventory build-up and strategic manganese ore purchases.

• Ended Q2 with $144.5 million in cash and a net cash positive position of $64 million.

• Adjusted diluted EPS rose to $0.13 from $0.00 sequentially.

• CapEx outflows were $22 million in Q2 2024.

Outlook and guidance

• Adjusted EBITDA guidance for 2024 raised and narrowed to $150–$170 million, reflecting confidence in H2 performance despite anticipated Q4 weakness.

• Q3 expected to be stable, but Q4 likely to be the weakest due to soft demand and idling of French operations.

• Management anticipates positive impact from U.S. trade actions and inventory normalization in 2025.

• Coreshell pilot plant commissioning expected in Q4 2024.