Ferroglobe PLC (NASDAQ: GSM) (“Ferroglobe”, the “Company”, or the
“Parent”), the world’s leading producer of silicon metal, and a
leading silicon- and manganese-based specialty alloys producer,
today announced results for the third quarter of 2018.
Earnings
Highlights
In Q3 2018, Ferroglobe posted a net loss of $2.9
million, or $(0.01) per share on a fully diluted basis. On an
adjusted basis, Q3 2018 net profit was $0.1 million, or $0.00 per
share on a fully diluted basis.
Q3 2018 reported EBITDA was $45.0 million, down
from $130.9 million in the prior quarter. On an adjusted basis, Q3
2018 EBITDA was $45.0 million, down 47.9% from Q2 2018 adjusted
EBITDA of $86.3 million. The Company reported adjusted EBITDA
margin of 8.5% for Q3 2018, compared to adjusted EBITDA margin of
14.8% for Q2 2018. Year-to-date adjusted EBITDA was $220.9
million, up 68.8% from $130.9 million in the same period in the
prior year.
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
Nine Months Ended |
|
Nine Months Ended |
|
|
September 30, 2018 |
|
June 30, 2018 |
|
September 30, 2017 |
|
September 30, 2018 |
|
September 30, 2017 |
$,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
526,838 |
|
|
$ |
582,977 |
|
|
$ |
451,628 |
|
|
$ |
1,670,519 |
|
|
$ |
1,273,475 |
|
Net (loss) profit |
|
$ |
(2,916 |
) |
|
$ |
66,030 |
|
|
$ |
(4,987 |
) |
|
$ |
98,728 |
|
|
$ |
(12,102 |
) |
Diluted EPS |
|
$ |
(0.01 |
) |
|
$ |
0.39 |
|
|
$ |
(0.02 |
) |
|
$ |
0.60 |
|
|
$ |
(0.04 |
) |
Adjusted net income
attributable to the parent |
|
$ |
77 |
|
|
$ |
25,684 |
|
|
$ |
9,225 |
|
|
$ |
59,057 |
|
|
$ |
10,459 |
|
Adjusted diluted
EPS |
|
$ |
0.00 |
|
|
$ |
0.14 |
|
|
$ |
0.05 |
|
|
$ |
0.34 |
|
|
$ |
0.07 |
|
Adjusted EBITDA |
|
$ |
45,042 |
|
|
$ |
86,296 |
|
|
$ |
56,110 |
|
|
$ |
220,942 |
|
|
$ |
130,863 |
|
Adjusted EBITDA
margin |
|
|
8.5 |
% |
|
|
14.8 |
% |
|
|
12.4 |
% |
|
|
13.2 |
% |
|
|
10.3 |
% |
“Following strong growth in our business over
several sequential quarters, market conditions in our main products
deteriorated through Q3,” said Pedro Larrea, CEO of Ferroglobe.
“However, Ferroglobe is still showing solid results overall for the
first nine months of 2018, with adjusted EBITDA up 69%
year-over-year to $220.9 million, leverage remaining below 2.0x and
a comfortable liquidity position.”
Mr. Larrea continued: “In response to the
evolving markets for our key products, Ferroglobe has taken swift
action to optimize our position across our global production base.
In this regard, we are curtailing production in our silicon metal
and manganese-based alloys businesses in order to take advantage of
our diversified portfolio by optimizing production among our most
cost effective plants and geographies. We also continue to look at
further measures to control our costs, to draw down inventories,
and to enhance our free cash flow profile. That said, we are
operating in a volatile environment currently and our financial
results may continue to be challenged in the near-term.”
Cash Flow and Balance
Sheet
Cash used for operations during Q3 2018
was $7.9 million, with working capital increasing
by $36.0 million. Net debt was $510.9 million as of September
30, 2018, up from $475.3 million as of June 30, 2018. “We did not
meet our cash flow goals in the third quarter,” said Phillip
Murnane, Ferroglobe’s CFO. “The deterioration in market conditions
during the quarter left us with elevated inventories, a key factor
in our decision to curtail our production.”
“Generating free cash flow through improvements
in operations, reductions in working capital, non-core asset sales,
and lowered interest expense remains our top priority” added Mr.
Murnane. “Given our Q3 results, our free cash flow targets for the
second half of 2018 have become a ‘stretch’ goal.
Regarding the potential refinancing of our $350 million of
Senior Notes, we will continue to evaluate the credit markets and
will act when the timing is right. In the mean time, our financial
position remains strong, with total liquidity of approximately $250
million and no material debt maturities until 2022.”
Discussion of Third Quarter 2018
Results
Sales
Sales for the three months ended September 30,
2018 of $526.8 million were 16.7% higher when compared to sales of
$451.6 million for the three months ended September 30, 2017. For
the quarter, total shipments were up 14.3% and the average selling
price was up 2.1% on Q3 2017. Sales for the nine months ended
September 30, 2018 of $1,671 million were up 31.2% when compared to
$1,273 million for the nine months ended September 30, 2017. For
the nine month period, total shipments were up 16.8% and the
average selling price was up 13.2% compared with the same period in
2017. Sales for the quarter and nine month period were aided by the
Company’s manganese-based alloy plants in Mo i Rana (Norway) and
Dunkirk (France), acquired by the Company on February 1, 2018.
|
|
Quarter Ended |
|
Quarter Ended |
|
|
|
Quarter Ended |
|
|
|
Nine Months Ended |
|
Nine Months Ended |
|
|
|
|
September 30, 2018 |
|
June 30, 2018 |
|
Change |
|
September 30, 2017 |
|
Change |
|
September 30, 2018 |
|
September 30, 2017 |
|
Change |
Shipments in
metric tons: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon
Metal |
|
|
81,686 |
|
|
85,913 |
|
-4.9% |
|
|
83,465 |
|
-2.1% |
|
|
259,214 |
|
|
242,099 |
|
7.1% |
Silicon-based Alloys |
|
|
75,964 |
|
|
78,214 |
|
-2.9% |
|
|
66,873 |
|
13.6% |
|
|
230,506 |
|
|
212,622 |
|
8.4% |
Manganese-based Alloys |
|
|
98,280 |
|
|
107,457 |
|
-8.5% |
|
|
73,642 |
|
33.5% |
|
|
276,913 |
|
|
201,745 |
|
37.3% |
Total
shipments* |
|
|
255,930 |
|
|
271,584 |
|
-5.8% |
|
|
223,980 |
|
14.3% |
|
|
766,633 |
|
|
656,466 |
|
16.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling
price ($/MT): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon
Metal |
|
$ |
2,636 |
|
$ |
2,773 |
|
-4.9% |
|
$ |
2,330 |
|
13.1% |
|
$ |
2,726 |
|
$ |
2,211 |
|
23.3% |
Silicon-based Alloys |
|
$ |
1,802 |
|
$ |
1,908 |
|
-5.6% |
|
$ |
1,645 |
|
9.5% |
|
$ |
1,889 |
|
$ |
1,564 |
|
20.8% |
Manganese-based Alloys |
|
$ |
1,211 |
|
$ |
1,304 |
|
-7.1% |
|
$ |
1,349 |
|
-10.2% |
|
$ |
1,289 |
|
$ |
1,320 |
|
-2.3% |
Total* |
|
$ |
1,841 |
|
$ |
1,943 |
|
-5.2% |
|
$ |
1,803 |
|
2.1% |
|
$ |
1,955 |
|
$ |
1,727 |
|
13.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling
price ($/lb.): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon
Metal |
|
$ |
1.20 |
|
$ |
1.26 |
|
-4.9% |
|
$ |
1.06 |
|
13.1% |
|
$ |
1.24 |
|
$ |
1.00 |
|
23.3% |
Silicon-based Alloys |
|
$ |
0.82 |
|
$ |
0.87 |
|
-5.6% |
|
$ |
0.75 |
|
9.5% |
|
$ |
0.86 |
|
$ |
0.71 |
|
20.8% |
Manganese-based Alloys |
|
$ |
0.55 |
|
$ |
0.59 |
|
-7.1% |
|
$ |
0.61 |
|
-10.2% |
|
$ |
0.58 |
|
$ |
0.60 |
|
-2.3% |
Total* |
|
$ |
0.84 |
|
$ |
0.88 |
|
-5.2% |
|
$ |
0.82 |
|
2.1% |
|
$ |
0.89 |
|
$ |
0.78 |
|
13.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Excludes by-products
and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Prices & Volumes By Product
During Q3 2018, the average selling prices
decreased by between 5% and 7% for all of our products
quarter-over-quarter, reflecting overall market conditions.
However, average selling prices for 2018 are well above 2017 for
silicon metal and silicon-based alloys, and at levels that are
compatible with historical trends. Manganese-based alloys prices in
2018 have significantly deteriorated, despite persistently high ore
prices, a situation that should revert going forward based on
historical market precedent.
Sales volumes in Q3 also decreased as compared
to Q2, primarily as a consequence of seasonal slowdown in Europe
and the impact of changing trade flows. Activity to date in
2018 shows healthy growth, with volume increases over the same
period in the prior year of 7% to 8% in silicon metal and
silicon-based alloys. A year-to-year comparison of manganese-based
alloys volumes is inapt in light of the Company’s acquisition of
new manganese-based alloy assets earlier this year.
Cost of Sales
Cost of sales was $334.5 million for the three
months ended September 30, 2018, an increase from $267.4 million
for the three months ended September 30, 2017, primarily driven by
higher input costs for raw materials and energy and higher volumes.
Cost of sales was $999.0 million for the nine months ended
September 30, 2018, an increase from $758.8 million for the same
period in 2017, primarily driven by higher sales and increases in
raw materials and energy prices, particularly manganese ore and
electrodes. Cost of goods sold as a percentage of sales increased
to 63.5% for the three months ended September 30, 2018 from 59.2%
for the three months ended September 30, 2017, whilst for the nine
months ended September 30, 2018, cost of sales as a percentage of
sales was 59.8% compared to 59.6% for the nine months ended
September 30, 2017.
Staff Costs and Other Operating Expenses
Staff costs and other operating expenses for the
three months ended September 30, 2018 and the nine months ended
September 30, 2018 were $153.2 million and $470.6 million,
respectively compared to $133.9 million and $399.7 million for the
corresponding periods in 2017. The increases were primarily related
to labour costs for the newly acquired manganese-based alloy
plants.
Operating Profit
Operating profit was $14.3 million and $180.4
million, respectively for the three and nine month periods ended
September 30, 2018, compared to $27.3 million and $41.3 million for
the three and nine month periods ended September 30, 2017. Included
in the nine months ended September 30, 2018 was a $44.6 million
bargain purchase gain related to the Company’s purchase of
manganese-based alloy plants mentioned above.
Net Loss Attributable to the Parent
As a result of the various factors described
above, we reported a net loss attributable to the Parent of $1.2
million, or ($0.01) per diluted share, for the three months ended
September 30, 2018 and a net loss attributable to the Parent of
$3.3 million, or ($0.02) for the three months ended September 30,
2017. We reported net income of $102.9 million, or $0.60 per
diluted share, for the nine months ended September 30, 2018,
compared to a net loss of $7.0 million, or ($0.04) per diluted
share for the nine months ended September 30, 2017.
Adjusted EBITDA
Adjusted EBITDA of $45.0 million, or 8.5% of
sales, for the three months ended September 30, 2018 was lower than
adjusted EBITDA of $56.1 million, or 12.4% of sales, for the three
months ended September 30, 2017. Adjusted EBITDA of $220.9 million,
or 13.2% of sales for the nine months ended September 30, 2018, was
higher than adjusted EBITDA of $130.9 million, or 10.3% of sales
for the nine months ended September 30, 2017.
Other recent
developments
In light of financial performance in Q3 2018,
near-term market outlook and the Company’s continued focus on cash
generation and deleveraging its balance sheet, no interim dividend
has been declared or is payable in respect of Q3 2018.
On August 21, 2018 the Company announced a $20
million programme for the purchase of its ordinary shares.
2,894,049 ordinary shares in the Company have been purchased under
the programme, of which 1,152,958 shares have been cancelled and
1,741,091 are held in Treasury. The average price paid per share
was $6.89. The programme closed on November 7, 2018.
Ferroglobe’s Executive Chairman, Javier López Madrid, has
advised the Company that, on October 3, 2018, the Supreme Court of
Spain (Tribunal Supremo) substantially confirmed the ruling of the
Spanish High Court (Audiencia Nacional) in the case related to the
misuse of corporate credit cards by 65 former directors and
executives of Bankia S.A and/or Caja Madrid, including Mr López
Madrid. The proceeding against Mr López Madrid relates to
expenditure totalling €34,807.81 incurred between 2010 and 2012 and
has been previously disclosed by the Company in its regulatory
filings and its press release of March 16, 2017. Mr. López Madrid
has advised the Company that, pursuant to the legal framework
applicable to this case, he has applied for a suspension or a
replacement of his sentence with the payment of a fine of €7,120.
The Company’s Board of Directors has closely monitored the
developments in this case, agreed that Mr. López Madrid remain as a
director of the Company and continues to support him in his role as
Executive Chairman.
Conference Call
Ferroglobe management will review the third
quarter results of 2018 during a conference call at 9 a.m.
Eastern Time on Tuesday, November 27, 2018.
The dial-in number for participants in the United
States is 877‑293‑5491 (conference ID 3499477). International
callers should dial +1 914‑495‑8526 (conference ID 3499477). Please
dial in at least five minutes prior to the call to register. The
call may also be accessed via an audio webcast available
at https://edge.media-server.com/m6/p/uz3q9tfh.
About Ferroglobe
Ferroglobe is one of the world’s leading
suppliers of silicon metal, silicon-based specialty alloys, and
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", "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
EBITDA, adjusted EBITDA, adjusted diluted profit
per ordinary share and adjusted profit are non-IFRS financial
metrics that, we believe, are pertinent measures of Ferroglobe’s
success.
Ferroglobe has included these financial
metrics to provide supplemental measures of its performance. The
Company believes these metrics are important 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:Phillip Murnane: +44 (0) 203 129 2265
Chief Financial Officer
Email: phillip.murnane@ferroglobe.com
Ferroglobe PLC and
SubsidiariesUnaudited Condensed
Consolidated Income Statement(in
thousands of U.S. dollars, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
Nine Months
Ended |
|
Nine Months
Ended |
|
|
September 30,
2018 |
|
June 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
Sales |
|
$ |
526,838 |
|
$ |
582,977 |
|
$ |
451,628 |
|
$ |
1,670,519 |
|
$ |
1,273,475 |
Cost of sales |
|
|
(334,526) |
|
|
(343,817) |
|
|
(267,364) |
|
|
(999,021) |
|
|
(758,781) |
Other operating income |
|
|
5,701 |
|
|
8,511 |
|
|
7,404 |
|
|
20,998 |
|
|
13,041 |
Staff costs |
|
|
(88,668) |
|
|
(88,743) |
|
|
(74,183) |
|
|
(259,834) |
|
|
(214,836) |
Other operating expense |
|
|
(64,524) |
|
|
(75,384) |
|
|
(59,741) |
|
|
(210,770) |
|
|
(184,874) |
Depreciation and amortization charges, operating allowances and
write-downs |
|
|
(30,750) |
|
|
(30,309) |
|
|
(27,076) |
|
|
(89,075) |
|
|
(80,699) |
Bargain purchase gain |
|
|
— |
|
|
44,633 |
|
|
— |
|
|
44,633 |
|
|
— |
Other gain (loss) |
|
|
221 |
|
|
2,752 |
|
|
(3,411) |
|
|
2,936 |
|
|
(6,002) |
Operating profit |
|
|
14,292 |
|
|
100,620 |
|
|
27,257 |
|
|
180,386 |
|
|
41,324 |
Net finance expense |
|
|
(13,952) |
|
|
(14,412) |
|
|
(14,528) |
|
|
(41,520) |
|
|
(42,045) |
Financial derivatives gain (loss) |
|
|
388 |
|
|
2,832 |
|
|
(1,823) |
|
|
1,455 |
|
|
(5,894) |
Exchange differences |
|
|
(3,071) |
|
|
(8,708) |
|
|
(1,529) |
|
|
(11,050) |
|
|
5,714 |
(Loss) profit before tax |
|
|
(2,343) |
|
|
80,332 |
|
|
9,377 |
|
|
129,271 |
|
|
(901) |
Income tax expense |
|
|
(573) |
|
|
(14,302) |
|
|
(14,364) |
|
|
(30,543) |
|
|
(11,201) |
(Loss) profit for the period |
|
|
(2,916) |
|
|
66,030 |
|
|
(4,987) |
|
|
98,728 |
|
|
(12,102) |
Loss attributable to non-controlling interest |
|
|
1,671 |
|
|
1,408 |
|
|
1,640 |
|
|
4,145 |
|
|
5,060 |
(Loss) profit attributable to the
parent |
|
$ |
(1,245) |
|
$ |
67,438 |
|
$ |
(3,347) |
|
$ |
102,873 |
|
$ |
(7,042) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
45,042 |
|
$ |
130,929 |
|
$ |
54,333 |
|
$ |
269,461 |
|
$ |
122,023 |
Adjusted EBITDA |
|
$ |
45,042 |
|
$ |
86,296 |
|
$ |
56,110 |
|
$ |
220,942 |
|
$ |
130,863 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
171,935 |
|
|
171,987 |
|
|
171,947 |
|
|
171,966 |
|
|
171,947 |
Diluted |
|
|
171,935 |
|
|
172,127 |
|
|
171,947 |
|
|
172,104 |
|
|
171,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) profit per ordinary
share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.01) |
|
$ |
0.39 |
|
$ |
(0.02) |
|
$ |
0.60 |
|
$ |
(0.04) |
Diluted |
|
$ |
(0.01) |
|
$ |
0.39 |
|
$ |
(0.02) |
|
$ |
0.60 |
|
$ |
(0.04) |
Ferroglobe PLC and
SubsidiariesUnaudited Condensed
Consolidated Statement of Financial
Position(in thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
|
June
30, |
|
December 31, |
|
|
2018 |
|
2018 |
|
2017 |
ASSETS |
Non-current assets |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
$ |
|
204,264 |
|
$ |
203,717 |
|
$ |
205,287 |
Other intangible assets |
|
|
|
55,997 |
|
|
57,897 |
|
|
58,658 |
Property, plant and equipment |
|
|
|
941,780 |
|
|
947,229 |
|
|
917,974 |
Non-current financial assets |
|
|
|
88,199 |
|
|
116,974 |
|
|
89,315 |
Deferred tax assets |
|
|
|
6,679 |
|
|
3,972 |
|
|
5,273 |
Non-current receivables from related parties |
|
|
|
2,315 |
|
|
2,332 |
|
|
2,400 |
Other non-current assets |
|
|
|
18,206 |
|
|
18,887 |
|
|
30,059 |
Total non-current assets |
|
|
|
1,317,440 |
|
|
1,351,008 |
|
|
1,308,966 |
Current assets |
|
|
|
|
|
|
|
|
|
|
Inventories |
|
|
|
554,676 |
|
|
532,574 |
|
|
361,231 |
Trade and other receivables |
|
|
|
142,233 |
|
|
151,062 |
|
|
111,463 |
Current receivables from related parties |
|
|
|
5,571 |
|
|
5,550 |
|
|
4,572 |
Current income tax assets |
|
|
|
15,848 |
|
|
10,405 |
|
|
17,158 |
Current financial assets |
|
|
|
2 |
|
|
854 |
|
|
2,469 |
Other current assets |
|
|
|
12,898 |
|
|
18,283 |
|
|
9,926 |
Cash and cash equivalents |
|
|
|
131,671 |
|
|
155,984 |
|
|
184,472 |
Total current assets |
|
|
|
862,899 |
|
|
874,712 |
|
|
691,291 |
Total assets |
|
$ |
|
2,180,339 |
|
$ |
2,225,720 |
|
$ |
2,000,257 |
|
|
|
|
|
|
|
|
|
|
|
EQUITY AND
LIABILITIES |
Equity |
|
$ |
|
987,388 |
|
$ |
1,004,125 |
|
$ |
937,758 |
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
Deferred income |
|
|
|
4,336 |
|
|
5,387 |
|
|
3,172 |
Provisions |
|
|
|
78,846 |
|
|
78,767 |
|
|
82,397 |
Bank borrowings |
|
|
|
133,056 |
|
|
108,143 |
|
|
— |
Obligations under finance leases |
|
|
|
57,389 |
|
|
61,078 |
|
|
69,713 |
Debt instruments |
|
|
|
341,102 |
|
|
340,564 |
|
|
339,332 |
Other financial liabilities |
|
|
|
39,867 |
|
|
42,138 |
|
|
49,011 |
Other non-current liabilities |
|
|
|
20,367 |
|
|
21,178 |
|
|
3,536 |
Deferred tax liabilities |
|
|
|
67,513 |
|
|
64,689 |
|
|
65,142 |
Total non-current
liabilities |
|
|
|
742,476 |
|
|
721,944 |
|
|
612,303 |
Current liabilities |
|
|
|
|
|
|
|
|
|
|
Provisions |
|
|
|
24,308 |
|
|
22,563 |
|
|
33,095 |
Bank borrowings |
|
|
|
1,341 |
|
|
1,241 |
|
|
1,003 |
Obligations under finance leases |
|
|
|
13,019 |
|
|
13,024 |
|
|
12,920 |
Debt instruments |
|
|
|
2,734 |
|
|
10,936 |
|
|
10,938 |
Other financial liabilities |
|
|
|
54,027 |
|
|
54,158 |
|
|
88,420 |
Payables to related parties |
|
|
|
12,273 |
|
|
17,599 |
|
|
12,973 |
Trade and other payables |
|
|
|
253,591 |
|
|
276,289 |
|
|
192,859 |
Current income tax liabilities |
|
|
|
6,435 |
|
|
4,210 |
|
|
7,419 |
Other current liabilities |
|
|
|
82,747 |
|
|
99,631 |
|
|
90,569 |
Total current liabilities |
|
|
|
450,475 |
|
|
499,651 |
|
|
450,196 |
Total equity and liabilities |
|
$ |
|
2,180,339 |
|
$ |
2,225,720 |
|
$ |
2,000,257 |
Ferroglobe PLC and
SubsidiariesUnaudited Condensed
Consolidated Statement of Cash
Flows(in thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
|
Nine Months
Ended |
|
Nine Months
Ended |
|
|
September 30,
2018 |
|
June 30, 2018 |
|
September 30,
2017 |
|
|
September 30,
2018 |
|
September 30,
2017 |
Cash
flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
profit for the period |
|
$ |
(2,916) |
|
$ |
66,030 |
|
$ |
(4,987) |
|
|
$ |
98,728 |
|
$ |
(12,102) |
Adjustments to reconcile net (loss) profit
to net cash used by operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense |
|
|
573 |
|
|
14,302 |
|
|
14,364 |
|
|
|
30,543 |
|
|
11,201 |
Depreciation and amortization charges, operating allowances and
write-downs |
|
|
30,750 |
|
|
30,309 |
|
|
27,076 |
|
|
|
89,075 |
|
|
80,699 |
Net
finance expense |
|
|
13,952 |
|
|
14,412 |
|
|
14,528 |
|
|
|
41,520 |
|
|
42,045 |
Financial
derivatives (gain) loss |
|
|
(388) |
|
|
(2,832) |
|
|
1,823 |
|
|
|
(1,455) |
|
|
5,894 |
Exchange
differences |
|
|
3,071 |
|
|
8,708 |
|
|
1,529 |
|
|
|
11,050 |
|
|
(5,714) |
Bargain
purchase gain |
|
|
— |
|
|
(44,633) |
|
|
— |
|
|
|
(44,633) |
|
|
— |
Share-based compensation |
|
|
1,050 |
|
|
33 |
|
|
— |
|
|
|
1,782 |
|
|
— |
Other
adjustments |
|
|
(221) |
|
|
(2,752) |
|
|
3,445 |
|
|
|
(2,936) |
|
|
6,037 |
Changes
in operating assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
in inventories |
|
|
(25,666) |
|
|
(59,050) |
|
|
(4,372) |
|
|
|
(192,197) |
|
|
(9,207) |
Decrease
(increase) in trade receivables |
|
|
6,224 |
|
|
(19,257) |
|
|
(90,108) |
|
|
|
(13,546) |
|
|
(76,887) |
(Decrease) increase in trade payables |
|
|
(21,213) |
|
|
476 |
|
|
3,370 |
|
|
|
49,638 |
|
|
12,583 |
Other |
|
|
10,543 |
|
|
6,817 |
|
|
6,631 |
|
|
|
(32,410) |
|
|
(28,420) |
Income taxes paid |
|
|
(5,257) |
|
|
(14,186) |
|
|
(3,768) |
|
|
|
(29,425) |
|
|
(9,984) |
Interest paid |
|
|
(18,400) |
|
|
(2,957) |
|
|
(22,249) |
|
|
|
(38,658) |
|
|
(36,356) |
Net
cash used by operating activities |
|
|
(7,898) |
|
|
(4,580) |
|
|
(52,718) |
|
|
|
(32,924) |
|
|
(20,211) |
Cash
flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments due to investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
intangible assets |
|
|
(149) |
|
|
(2,221) |
|
|
(88) |
|
|
|
(3,073) |
|
|
(498) |
Property,
plant and equipment |
|
|
(25,696) |
|
|
(29,778) |
|
|
(14,692) |
|
|
|
(78,005) |
|
|
(41,373) |
Other |
|
|
— |
|
|
(8) |
|
|
— |
|
|
|
(8) |
|
|
(14) |
Disposals: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
non-current assets |
|
|
— |
|
|
12,734 |
|
|
— |
|
|
|
12,734 |
|
|
— |
Other |
|
|
947 |
|
|
1,904 |
|
|
— |
|
|
|
6,861 |
|
|
— |
Acquisition of
subsidiary |
|
|
— |
|
|
— |
|
|
— |
|
|
|
(20,379) |
|
|
— |
Interest and finance
income received |
|
|
638 |
|
|
2,273 |
|
|
54 |
|
|
|
2,990 |
|
|
618 |
Net
cash used by investing activities |
|
|
(24,260) |
|
|
(15,096) |
|
|
(14,726) |
|
|
|
(78,880) |
|
|
(41,267) |
Cash
flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid |
|
|
(10,321) |
|
|
(10,321) |
|
|
— |
|
|
|
(20,642) |
|
|
— |
Payment for debt
issuance costs |
|
|
— |
|
|
— |
|
|
(3,210) |
|
|
|
(4,476) |
|
|
(16,765) |
Repayment of other
financial liabilities |
|
|
— |
|
|
(33,096) |
|
|
— |
|
|
|
(33,096) |
|
|
— |
Proceeds from debt
issuance |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
350,000 |
Increase/(decrease) in bank
borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
|
25,286 |
|
|
37,668 |
|
|
118,468 |
|
|
|
245,318 |
|
|
149,923 |
Payments |
|
|
— |
|
|
— |
|
|
(38,296) |
|
|
|
(106,514) |
|
|
(425,976) |
Proceeds from stock
option exercises |
|
|
— |
|
|
240 |
|
|
— |
|
|
|
240 |
|
|
— |
Other amounts paid due
to financing activities |
|
|
(3,067) |
|
|
(4,648) |
|
|
(990) |
|
|
|
(10,702) |
|
|
(18,895) |
Payments to acquire or
redeem own shares |
|
|
(3,502) |
|
|
— |
|
|
— |
|
|
|
(3,502) |
|
|
— |
Net
cash provided (used) by financing activities |
|
|
8,396 |
|
|
(10,157) |
|
|
75,972 |
|
|
|
66,626 |
|
|
38,287 |
Total
net cash flows for the period |
|
|
(23,762) |
|
|
(29,833) |
|
|
8,528 |
|
|
|
(45,178) |
|
|
(23,191) |
Beginning
balance of cash and cash equivalents |
|
|
155,984 |
|
|
197,669 |
|
|
183,561 |
|
|
|
184,472 |
|
|
196,982 |
Exchange
differences on cash and cash equivalents in foreign currencies |
|
|
(551) |
|
|
(11,852) |
|
|
(2,326) |
|
|
|
(7,623) |
|
|
15,972 |
Ending
balance of cash and cash equivalents |
|
$ |
131,671 |
|
$ |
155,984 |
|
$ |
189,763 |
|
|
$ |
131,671 |
|
$ |
189,763 |
Adjusted EBITDA
($,000): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2018 |
|
|
June 30, 2018 |
|
|
September 30, 2017 |
|
|
September 30, 2018 |
|
|
September 30, 2017 |
|
(Loss) profit attributable to the parent |
|
$ |
(1,245 |
) |
|
$ |
67,438 |
|
|
$ |
(3,347 |
) |
|
$ |
102,873 |
|
|
$ |
(7,042 |
) |
Loss
attributable to non-controlling interest |
|
|
(1,671 |
) |
|
|
(1,408 |
) |
|
|
(1,640 |
) |
|
|
(4,145 |
) |
|
|
(5,060 |
) |
Income
tax expense |
|
|
573 |
|
|
|
14,302 |
|
|
|
14,364 |
|
|
|
30,543 |
|
|
|
11,201 |
|
Net
finance expense |
|
|
13,952 |
|
|
|
14,412 |
|
|
|
14,528 |
|
|
|
41,520 |
|
|
|
42,045 |
|
Financial derivatives (gain) loss |
|
|
(388 |
) |
|
|
(2,832 |
) |
|
|
1,823 |
|
|
|
(1,455 |
) |
|
|
5,894 |
|
Exchange
differences |
|
|
3,071 |
|
|
|
8,708 |
|
|
|
1,529 |
|
|
|
11,050 |
|
|
|
(5,714 |
) |
Depreciation and amortization charges, operating allowances and
write-downs |
|
|
30,750 |
|
|
|
30,309 |
|
|
|
27,076 |
|
|
|
89,075 |
|
|
|
80,699 |
|
EBITDA |
|
|
45,042 |
|
|
|
130,929 |
|
|
|
54,333 |
|
|
|
269,461 |
|
|
|
122,023 |
|
Non-controlling interest settlement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,751 |
|
Power
credit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,696 |
) |
Long
lived asset charge due to reclassification of discontinued
operations to continuing operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,608 |
|
Accrual
of contingent liabilities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,400 |
|
Business
interruption |
|
|
— |
|
|
|
— |
|
|
|
(1,980 |
) |
|
|
— |
|
|
|
(1,980 |
) |
Step-up
valuation adjustment |
|
|
— |
|
|
|
— |
|
|
|
3,757 |
|
|
|
— |
|
|
|
3,757 |
|
Bargain
purchase gain |
|
|
— |
|
|
|
(44,633 |
) |
|
|
— |
|
|
|
(44,633 |
) |
|
|
— |
|
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,886 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
45,042 |
|
|
$ |
86,296 |
|
|
$ |
56,110 |
|
|
$ |
220,942 |
|
|
$ |
130,863 |
|
Adjusted profit attributable to Ferroglobe
($,000): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2018 |
|
|
June 30, 2018 |
|
|
September 30, 2017 |
|
|
September 30, 2018 |
|
|
September 30, 2017 |
|
(Loss) profit attributable to the parent |
|
$ |
(1,245 |
) |
|
$ |
67,438 |
|
|
$ |
(3,347 |
) |
|
$ |
102,873 |
|
|
$ |
(7,042 |
) |
Tax rate
adjustment |
|
|
1,322 |
|
|
|
(11,404 |
) |
|
|
11,363 |
|
|
|
(10,824 |
) |
|
|
11,489 |
|
Non-controlling interest settlement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,191 |
|
Power
credit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,513 |
) |
Long
lived asset charge due to reclassification of discontinued
operations to continuing operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,773 |
|
Accrual
of contingent liabilities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,352 |
|
Business
interruption |
|
|
— |
|
|
|
— |
|
|
|
(1,346 |
) |
|
|
— |
|
|
|
(1,346 |
) |
Step-up
valuation adjustment |
|
|
— |
|
|
|
— |
|
|
|
2,555 |
|
|
|
— |
|
|
|
2,555 |
|
Bargain
purchase gain |
|
|
— |
|
|
|
(30,350 |
) |
|
|
— |
|
|
|
(30,350 |
) |
|
|
— |
|
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,642 |
) |
|
|
— |
|
Adjusted profit attributable to the parent |
|
$ |
77 |
|
|
$ |
25,684 |
|
|
$ |
9,225 |
|
|
$ |
59,057 |
|
|
$ |
10,459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
profit per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2018 |
|
|
June 30, 2018 |
|
|
September 30, 2017 |
|
|
September 30, 2018 |
|
|
September 30, 2017 |
|
Diluted (loss) profit per ordinary share |
|
$ |
(0.01 |
) |
|
$ |
0.39 |
|
|
$ |
(0.02 |
) |
|
$ |
0.60 |
|
|
$ |
(0.04 |
) |
Tax
rate adjustment |
|
|
0.01 |
|
|
|
(0.07 |
) |
|
|
0.07 |
|
|
|
(0.06 |
) |
|
|
0.07 |
|
Non-controlling interest settlement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
Power credit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
Long
lived asset charge due to reclassification of discontinued
operations to continuing operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
Accrual of contingent liabilities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.03 |
|
Business interruption |
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
|
|
(0.01 |
) |
Step-up valuation adjustment |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
Bargain purchase gain |
|
|
— |
|
|
|
(0.18 |
) |
|
|
— |
|
|
|
(0.18 |
) |
|
|
— |
|
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
Adjusted
diluted profit per ordinary share |
|
$ |
0.00 |
|
|
$ |
0.14 |
|
|
$ |
0.05 |
|
|
$ |
0.34 |
|
|
$ |
0.07 |
|
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