Ferroglobe PLC (NASDAQ: GSM) (“Ferroglobe”, the “Company”, or the
“Parent”), a leading producer globally of silicon metal,
silicon-based and manganese-based specialty alloys, today announced
results for the second quarter of 2020.
Q2 2020 Earnings
Highlights
In Q2 2020, Ferroglobe posted a net loss of $(14.0)
million, or $(0.07) per share on a fully diluted basis. On an
adjusted basis, the Q2 2020 net loss was $(11.1) million, or
$(0.07) per share on a fully diluted basis.
Q2 2020 reported EBITDA was $22.1 million, up
from $(20.2) million in the prior quarter. On an adjusted basis, Q2
2020 EBITDA was $22.4 million, up from Q1 2020 adjusted EBITDA of
$(17.6) million. The Company reported an adjusted EBITDA margin of
9.0% for Q2 2020, compared to an adjusted EBITDA margin of -5.7%
for Q1 2020. The improvement in margins is attributable to
operational and financial management, resulting in significant cost
improvement.
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
Six Months Ended |
|
Six Months Ended |
$,000
(unaudited) |
|
June 30, 2020 |
|
March 31, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
250,004 |
|
|
$ |
311,223 |
|
|
$ |
409,479 |
|
|
$ |
561,226 |
|
|
$ |
856,870 |
|
Net (loss) profit |
|
$ |
(14,035 |
) |
|
$ |
(49,057 |
) |
|
$ |
(43,658 |
) |
|
$ |
(63,093 |
) |
|
$ |
(72,212 |
) |
Diluted EPS |
|
$ |
(0.07 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.40 |
) |
Adjusted net (loss) income
attributable to the parent |
|
$ |
(11,064 |
) |
|
$ |
(37,714 |
) |
|
$ |
(22,221 |
) |
|
$ |
(48,777 |
) |
|
$ |
(44,115 |
) |
Adjusted diluted EPS |
|
$ |
(0.07 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.26 |
) |
Adjusted EBITDA |
|
$ |
22,413 |
|
|
$ |
(17,617 |
) |
|
$ |
5,035 |
|
|
$ |
4,796 |
|
|
$ |
8,362 |
|
Adjusted EBITDA margin |
|
|
9.0 |
% |
|
|
-5.7 |
% |
|
|
1.2 |
% |
|
|
0.9 |
% |
|
|
1.0 |
% |
Marco Levi, Ferroglobe’s Chief Executive
Officer, commented, “Given the unprecedented operating environment
created by COVID-19, the business has endured a number of
challenges during the quarter. However, our ability to react
quickly and leverage our assets to drive down costs, resulted in
continued improvement in our financials during the quarter.”
Dr. Levi added, “With the looming uncertainties ahead of us, we
will continue to take the actions necessary to navigate these
times. Simultaneously, we are committed to executing our new
strategic plan and have commenced with a number of initatives in
the near term. This three year plan is expected to contribute
$150 million of incremental EBITDA and improve cash by $70
million.”
Cash Flow and Balance
Sheet
Cash generated from operations during Q2 2020
was $38.1 million, with an improvement in working capital
positively impacted by a decrease in trade receivables, offset by a
decrease in payables and an increase in inventories. Working
capital decreased by $27 million, from $348 million as of March 31,
2020 to $321 million at June 30, 2020.
Gross debt was $451 million as of June 30, 2020,
up from $443 million as of March 31, 2020, primarily as a result of
the $11 million interest accrued on the group’s senior unsecured
notes (the “Notes”), due to be paid on August 31, 2020.
Beatriz García-Cos, Ferroglobe’s Chief Financial
Officer, commented, “A slowdown across all of our core product
categories resulted in a decline in our second quarter sales by 20%
compared to the prior quarter, reflecting the impact of COVID-19 on
the business. By continuing to make operational changes and
focusing on cost reduction, however, we managed to return the
business to positive EBITDA. Furthermore, our diligent
management of the business led to further working capital reduction
and an improvement in our cash balance.” Ms. García-Cos
added, “The new strategic plan provides us a roadmap to drive
profitability through the cycle and continued improvement in our
cash generation.”
COVID-19
Since January 2020, the COVID-19 pandemic has
spread to various jurisdictions where the Company does business.
The Company has been monitoring the evolving situation, and
consequent emerging risk. Among other steps, the Company has
implemented a coronavirus crisis management team, which has been
meeting regularly to ensure the Company and its subsidiaries take
appropriate action to protect all employees and ensure business
continuity.
While it is difficult to forecast all the
impacts of the COVID-19 pandemic, at the present time the Company’s
day-to-day operations continue without being materially affected
and the pandemic is not causing disruption in our business and
supply chains. As they evolve, however, such impacts could
have a material adverse effect on our business, results of
operations and financial condition.
During the second quarter demand for our
products was adversely impacted by COVID-19. The Company is
continuously evaluating how evolving customer demand and sales
price evolution stand to affect the Company’s business and results
in the next twelve months.
In connection with the preparation of our
consolidated financial statements, we conducted an evaluation as to
whether there were conditions and events, considered in the
aggregate, which raise substantial doubt as to the Company’s
ability to continue as a going concern in the one year period after
the date of the issuance of these interim financial statements. For
this interim financial statement, the evaluation was updated. Given
the speed and frequency of continuously evolving developments with
respect to this pandemic and the uncertainties this may bring for
the Company and the demand for its products, it is difficult to
forecast the level of trading activity and hence cash flow in the
next twelve months. Developing a reliable estimate of the potential
impact on the results of operations and cash flow at this time is
difficult as markets and industries react to the pandemic and the
measures implemented in response to it, but our downside scenario
analysis supports an expectation that the Company will have cash
headroom to continue to operate throughout the next twelve months.
The key assumption underlying this assessment is a forecast
recovery in trading activity in the latter part of 2020.
Additionally, the Indenture governing the Notes
includes provisions which, in the event of a change of control,
would require the Company to offer to redeem the outstanding senior
Notes at a cash purchase price equal to 101% of the principal
amount of the Notes, plus any accrued and unpaid interest. Based on
the provisions cited above, a change of control as defined in the
Indenture is unlikely to occur, but the matter it is not within the
Company’s control. If a change of control were to occur, the
Company may not have sufficient financial resources available to
satisfy all of its obligations. Management is pursuing additional
sources of financing to increase liquidity to fund operations.
Subsequent
events
The Company sold CO2 emission rights during July
and August. This resulted in proceeds of approximately $33 million.
The Company is closely monitoring demand levels to determine
appropriate production levels and gauge the quantum of CO2 emission
rights that will need to be reacquired in the latter part of 2020
and/or in 2021.
Discussion of Second Quarter 2020
Results
The Company notes that the financial results
presented for the second quarter and year to date as of June 30,
2020 are unaudited and may be subsequently adjusted for items
including impairment of goodwill and long-lived assets. Management
is continually assessing the potential impacts of COVID-19 and the
Company’s pending new strategy, and will make such adjustments as
and when required.
Sales
Sales for Q2 2020 were $250.0 million, a
decrease of 19.7% compared to $311.2 million in Q1 2020. For Q2
2020, total shipments were down 24.1% and the average selling price
was up 7.0% compared with Q1 2020.
|
|
Quarter Ended |
|
Quarter Ended |
|
|
|
Quarter Ended |
|
|
|
Six Months Ended |
|
Six Months Ended |
|
|
|
|
June 30, 2020 |
|
March 31, 2020 |
|
Change |
|
June 30, 2019 |
|
Change |
|
June 30, 2020 |
|
June 30, 2019 |
|
Change |
Shipments in
metric tons: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Metal |
|
|
47,884 |
|
|
53,321 |
|
-10.2 |
% |
|
|
54,084 |
|
-11.5 |
% |
|
|
101,205 |
|
|
116,353 |
|
-13.0 |
% |
Silicon-based Alloys |
|
|
39,479 |
|
|
60,932 |
|
-35.2 |
% |
|
|
79,264 |
|
-50.2 |
% |
|
|
100,411 |
|
|
161,065 |
|
-37.7 |
% |
Manganese-based Alloys |
|
|
55,290 |
|
|
73,724 |
|
-25.0 |
% |
|
|
99,555 |
|
-44.5 |
% |
|
|
129,014 |
|
|
203,224 |
|
-36.5 |
% |
Total shipments* |
|
|
142,653 |
|
|
187,977 |
|
-24.1 |
% |
|
|
232,903 |
|
-38.8 |
% |
|
|
330,630 |
|
|
480,642 |
|
-31.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
selling price ($/MT): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Metal |
|
$ |
2,215 |
|
$ |
2,212 |
|
0.1 |
% |
|
$ |
2,320 |
|
-4.5 |
% |
|
$ |
2,213 |
|
$ |
2,340 |
|
-5.4 |
% |
Silicon-based Alloys |
|
$ |
1,537 |
|
$ |
1,474 |
|
4.3 |
% |
|
$ |
1,572 |
|
-2.2 |
% |
|
$ |
1,499 |
|
$ |
1,621 |
|
-7.5 |
% |
Manganese-based Alloys |
|
$ |
1,088 |
|
$ |
973 |
|
11.8 |
% |
|
$ |
1,188 |
|
-8.4 |
% |
|
$ |
1,022 |
|
$ |
1,180 |
|
-13.4 |
% |
Total* |
|
$ |
1,591 |
|
$ |
1,487 |
|
7.0 |
% |
|
$ |
1,582 |
|
0.6 |
% |
|
$ |
1,531 |
|
$ |
1,609 |
|
-4.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
selling price ($/lb.): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silicon Metal |
|
$ |
1.00 |
|
$ |
1.00 |
|
0.1 |
% |
|
$ |
1.05 |
|
-4.5 |
% |
|
$ |
1.00 |
|
$ |
1.06 |
|
-5.4 |
% |
Silicon-based Alloys |
|
$ |
0.70 |
|
$ |
0.67 |
|
4.3 |
% |
|
$ |
0.71 |
|
-2.2 |
% |
|
$ |
0.68 |
|
$ |
0.74 |
|
-7.5 |
% |
Manganese-based Alloys |
|
$ |
0.49 |
|
$ |
0.44 |
|
11.8 |
% |
|
$ |
0.54 |
|
-8.4 |
% |
|
$ |
0.46 |
|
$ |
0.54 |
|
-13.4 |
% |
Total* |
|
$ |
0.72 |
|
$ |
0.67 |
|
7.0 |
% |
|
$ |
0.72 |
|
0.6 |
% |
|
$ |
0.69 |
|
$ |
0.73 |
|
-4.8 |
% |
* Excludes by-products and other
Sales Prices & Volumes By
Product
During Q2 2020, total product average selling
prices increased by 7.0% versus Q1 2020. Q2 average selling prices
of silicon metal increased 0.1%, silicon-based alloys prices
increased 4.3%, and manganese-based alloys prices increased
11.8%.
Sales volumes in Q2 declined by 24.1% versus the
prior quarter. Q2 sales volumes of silicon metal decreased 10.2%,
silicon-based alloys decreased 35.2%, and manganese-based alloys
decreased 25.0% versus Q1 2020.
Cost of
Sales
Cost of sales was $153.3 million in Q2 2020, a
decrease from $243.4 million in the prior quarter. Cost of sales as
a percentage of sales decreased to 61.3% in Q2 2020 versus 78.2%
for Q1 2020, an improvement mainly due to to lower energy prices in
Europe, lower raw material costs including manganese ore, and
optimizing economics by allocating production curtailments to the
least cost-competitive plants.
Other Operating
Expenses
Other operating expenses amounted to $35.9
million in Q2 2020, a decrease from $40.1 million in the prior
quarter. This decrease is primarily attributable to a decrease in
commercial expenses resulting from lower sales volume.
Net Loss Attributable to the
Parent
In Q2 2020, net loss attributable to the Parent
was $12.1 million, or $(0.07) per diluted share, compared to a net
loss attributable to the Parent of $47.9 million, or $(0.28) per
diluted share in Q1 2020.
Adjusted
EBITDA
In Q2 2020, adjusted EBITDA was $22.4 million,
or 9.0% of sales, compared to adjusted EBITDA of $(17.6) million,
or -5.7% of sales in Q1 2020, primarily due to higher pricing and
lower costs incurred in Q2 2020.
Conference
Call
Ferroglobe management will review the
second quarter during a conference call at 9:00 a.m. Eastern
Time on September 1, 2020.
The dial-in number for participants in the
United States is 877‑293‑5491 (conference ID 3128367).
International callers should dial +1 914‑495‑8526 (conference ID
3128367). 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/mmc/p/a4i7n7ab.
About Ferroglobe
Ferroglobe is one of the world’s leading
suppliers of silicon metal, silicon-based and manganese-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”, “target”, “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
Adjusted EBITDA, adjusted EBITDA margin,
adjusted net profit, adjusted profit per share, working capital and
net debt, 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:
Gaurav Mehta EVP – Investor Relations
Email: investor.relations@ferroglobe.com
Louie Toma Managing Director Hayden
IRTel:
1-774-291-6000Email: louie@haydenir.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 |
|
Six Months Ended |
|
Six Months Ended |
|
|
June 30, 2020 |
|
March 31, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
Sales |
|
$ |
250,004 |
|
|
$ |
311,223 |
|
|
$ |
409,479 |
|
|
$ |
561,226 |
|
|
$ |
856,870 |
|
Cost of sales |
|
|
(153,291 |
) |
|
|
(243,360 |
) |
|
|
(292,432 |
) |
|
|
(396,651 |
) |
|
|
(621,800 |
) |
Other operating income |
|
|
10,160 |
|
|
|
7,768 |
|
|
|
14,530 |
|
|
|
17,928 |
|
|
|
28,551 |
|
Staff costs |
|
|
(48,912 |
) |
|
|
(55,097 |
) |
|
|
(74,852 |
) |
|
|
(104,009 |
) |
|
|
(149,115 |
) |
Other operating expense |
|
|
(35,953 |
) |
|
|
(40,067 |
) |
|
|
(62,924 |
) |
|
|
(76,020 |
) |
|
|
(116,841 |
) |
Depreciation and amortization charges, operating allowances and
write-downs |
|
|
(27,459 |
) |
|
|
(28,668 |
) |
|
|
(30,204 |
) |
|
|
(56,127 |
) |
|
|
(60,574 |
) |
Impairment losses |
|
|
— |
|
|
|
— |
|
|
|
(1,195 |
) |
|
|
— |
|
|
|
(1,335 |
) |
Other gain (loss) |
|
|
85 |
|
|
|
(671 |
) |
|
|
275 |
|
|
|
(586 |
) |
|
|
(122 |
) |
Operating (loss) profit |
|
|
(5,365 |
) |
|
|
(48,872 |
) |
|
|
(37,323 |
) |
|
|
(54,239 |
) |
|
|
(64,366 |
) |
Net finance expense |
|
|
(16,693 |
) |
|
|
(16,484 |
) |
|
|
(15,047 |
) |
|
|
(33,177 |
) |
|
|
(28,870 |
) |
Financial derivatives (loss) gain |
|
|
— |
|
|
|
3,168 |
|
|
|
(295 |
) |
|
|
3,168 |
|
|
|
969 |
|
Exchange differences |
|
|
2,633 |
|
|
|
2,436 |
|
|
|
5,080 |
|
|
|
5,069 |
|
|
|
3,601 |
|
(Loss) profit before tax |
|
|
(19,425 |
) |
|
|
(59,753 |
) |
|
|
(47,585 |
) |
|
|
(79,179 |
) |
|
|
(88,666 |
) |
Income tax benefit (expense) |
|
|
5,390 |
|
|
|
10,696 |
|
|
|
4,890 |
|
|
|
16,086 |
|
|
|
13,100 |
|
(Loss) profit for the period from continuing
operations |
|
|
(14,035 |
) |
|
|
(49,057 |
) |
|
|
(42,695 |
) |
|
|
(63,093 |
) |
|
|
(75,566 |
) |
Profit for the period from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
(963 |
) |
|
|
— |
|
|
|
3,354 |
|
(Loss) profit for the
period |
|
|
(14,035 |
) |
|
|
(49,057 |
) |
|
|
(43,658 |
) |
|
|
(63,093 |
) |
|
|
(72,212 |
) |
Loss (profit) attributable to non-controlling interest |
|
|
1,928 |
|
|
|
1,159 |
|
|
|
2,835 |
|
|
|
3,087 |
|
|
|
4,559 |
|
(Loss) profit attributable to the
parent |
|
$ |
(12,107 |
) |
|
$ |
(47,898 |
) |
|
$ |
(40,823 |
) |
|
$ |
(60,006 |
) |
|
$ |
(67,653 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
22,093 |
|
|
$ |
(20,204 |
) |
|
$ |
(7,119 |
) |
|
$ |
1,888 |
|
|
$ |
(3,792 |
) |
Adjusted EBITDA |
|
$ |
22,413 |
|
|
$ |
(17,617 |
) |
|
$ |
5,035 |
|
|
$ |
4,796 |
|
|
$ |
8,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
169,254 |
|
|
|
169,249 |
|
|
|
169,123 |
|
|
|
169,252 |
|
|
|
169,123 |
|
Diluted |
|
|
169,254 |
|
|
|
169,249 |
|
|
|
169,123 |
|
|
|
169,252 |
|
|
|
169,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) profit
per ordinary share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.07 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.40 |
) |
Diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.40 |
) |
Ferroglobe PLC and
SubsidiariesUnaudited Condensed
Consolidated Statement of Financial
Position(in thousands of U.S.
dollars)
|
|
June 30, |
|
March 31, |
|
December 31, |
|
|
2020 |
|
2020 |
|
2019 |
ASSETS |
Non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
$ |
29,702 |
|
|
$ |
29,702 |
|
|
$ |
29,702 |
|
Other intangible assets |
|
|
45,655 |
|
|
|
50,373 |
|
|
|
51,267 |
|
Property, plant and equipment |
|
|
677,081 |
|
|
|
689,383 |
|
|
|
740,906 |
|
Other non-current financial assets |
|
|
6,404 |
|
|
|
5,683 |
|
|
|
2,618 |
|
Deferred tax assets |
|
|
43,102 |
|
|
|
65,360 |
|
|
|
59,551 |
|
Non-current receivables from related parties |
|
|
2,240 |
|
|
|
2,191 |
|
|
|
2,247 |
|
Other non-current assets |
|
|
4,228 |
|
|
|
1,520 |
|
|
|
1,597 |
|
Non-current restricted cash and cash equivalents |
|
|
28,366 |
|
|
|
28,173 |
|
|
|
28,323 |
|
Total non-current assets |
|
|
836,778 |
|
|
|
872,385 |
|
|
|
916,211 |
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Inventories |
|
|
305,438 |
|
|
|
287,258 |
|
|
|
354,121 |
|
Trade and other receivables |
|
|
172,036 |
|
|
|
216,970 |
|
|
|
309,064 |
|
Current receivables from related parties |
|
|
2,955 |
|
|
|
2,895 |
|
|
|
2,955 |
|
Current income tax assets |
|
|
12,151 |
|
|
|
16,298 |
|
|
|
27,930 |
|
Other current financial assets |
|
|
4,791 |
|
|
|
5,062 |
|
|
|
5,544 |
|
Other current assets |
|
|
22,602 |
|
|
|
16,113 |
|
|
|
23,676 |
|
Cash and cash equivalents * |
|
|
124,876 |
|
|
|
116,316 |
|
|
|
94,852 |
|
Total current assets |
|
|
644,849 |
|
|
|
660,912 |
|
|
|
818,142 |
|
Total assets |
|
$ |
1,481,627 |
|
|
$ |
1,533,297 |
|
|
$ |
1,734,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES |
Equity |
|
$ |
519,974 |
|
|
$ |
525,117 |
|
|
$ |
602,297 |
|
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income |
|
|
4,983 |
|
|
|
9,081 |
|
|
|
1,253 |
|
Provisions |
|
|
81,659 |
|
|
|
79,135 |
|
|
|
84,852 |
|
Bank borrowings |
|
|
92,552 |
|
|
|
111,583 |
|
|
|
144,388 |
|
Lease liabilities |
|
|
13,512 |
|
|
|
14,642 |
|
|
|
16,972 |
|
Debt instruments |
|
|
345,284 |
|
|
|
344,639 |
|
|
|
344,014 |
|
Other financial liabilities |
|
|
33,316 |
|
|
|
32,702 |
|
|
|
43,157 |
|
Other non-current liabilities |
|
|
25,785 |
|
|
|
26,817 |
|
|
|
25,906 |
|
Deferred tax liabilities |
|
|
40,162 |
|
|
|
69,084 |
|
|
|
74,057 |
|
Total non-current
liabilities |
|
|
637,252 |
|
|
|
687,683 |
|
|
|
734,599 |
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Provisions |
|
|
37,367 |
|
|
|
34,853 |
|
|
|
46,091 |
|
Bank borrowings |
|
|
245 |
|
|
|
1,369 |
|
|
|
14,611 |
|
Lease liabilities |
|
|
8,592 |
|
|
|
8,932 |
|
|
|
8,900 |
|
Debt instruments |
|
|
10,994 |
|
|
|
2,820 |
|
|
|
10,937 |
|
Other financial liabilities |
|
|
26,318 |
|
|
|
23,101 |
|
|
|
23,382 |
|
Payables to related parties |
|
|
2,056 |
|
|
|
4,572 |
|
|
|
4,830 |
|
Trade and other payables |
|
|
156,053 |
|
|
|
156,634 |
|
|
|
189,229 |
|
Current income tax liabilities |
|
|
2,146 |
|
|
|
1,485 |
|
|
|
3,048 |
|
Other current liabilities |
|
|
80,630 |
|
|
|
86,731 |
|
|
|
96,429 |
|
Liabilities associated with assets classified as held for sale |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total current
liabilities |
|
|
324,401 |
|
|
|
320,497 |
|
|
|
397,457 |
|
Total equity and
liabilities |
|
$ |
1,481,627 |
|
|
$ |
1,533,297 |
|
|
$ |
1,734,353 |
|
*Cash and cash equivalents at June 30, 2020
includes the cash balance of the group’s European A/R
securitization program of $38,961 ($38,745 and $38,778 at March 31,
2020 and December 31, 2019, respectively)
Ferroglobe PLC and
SubsidiariesUnaudited Condensed
Consolidated Statement of Cash
Flows(in thousands of U.S.
dollars)
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
Six Months Ended |
|
Six Months Ended |
|
|
June 30, 2020 |
|
March 31, 2020 |
|
June 30, 2019* |
|
June 30, 2020 |
|
June 30, 2019* |
Cash flows
from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) profit for the period |
|
$ |
(14,035 |
) |
|
$ |
(49,057 |
) |
|
$ |
(43,658 |
) |
|
$ |
(63,092 |
) |
|
$ |
(72,212 |
) |
Adjustments to
reconcile net (loss) profit to net cash used by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense |
|
|
(5,390 |
) |
|
|
(10,696 |
) |
|
|
(5,215 |
) |
|
|
(16,086 |
) |
|
|
(11,919 |
) |
Depreciation and amortization charges, operating allowances and
write-downs |
|
|
27,459 |
|
|
|
28,668 |
|
|
|
31,327 |
|
|
|
56,127 |
|
|
|
63,404 |
|
Net finance expense |
|
|
16,693 |
|
|
|
16,484 |
|
|
|
16,145 |
|
|
|
33,177 |
|
|
|
30,901 |
|
Financial derivatives loss (gain) |
|
|
— |
|
|
|
(3,168 |
) |
|
|
295 |
|
|
|
(3,168 |
) |
|
|
(969 |
) |
Exchange differences |
|
|
(2,633 |
) |
|
|
(2,436 |
) |
|
|
(5,080 |
) |
|
|
(5,069 |
) |
|
|
(3,601 |
) |
Impairment losses |
|
|
— |
|
|
|
— |
|
|
|
1,195 |
|
|
|
— |
|
|
|
1,335 |
|
Bargain purchase gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gain on disposal of discontinued operation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Share-based compensation |
|
|
704 |
|
|
|
722 |
|
|
|
933 |
|
|
|
1,426 |
|
|
|
2,265 |
|
Other adjustments |
|
|
(85 |
) |
|
|
671 |
|
|
|
(275 |
) |
|
|
586 |
|
|
|
122 |
|
Changes in
operating assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
(Increase) decrease in inventories |
|
|
(12,471 |
) |
|
|
51,577 |
|
|
|
(46,950 |
) |
|
|
39,106 |
|
|
|
(46,915 |
) |
(Increase) decrease in trade receivables |
|
|
45,537 |
|
|
|
83,832 |
|
|
|
(32,316 |
) |
|
|
129,369 |
|
|
|
(3,945 |
) |
Increase (decrease) in trade payables |
|
|
(4,875 |
) |
|
|
(25,504 |
) |
|
|
21,625 |
|
|
|
(30,379 |
) |
|
|
(1,342 |
) |
Other |
|
|
(16,287 |
) |
|
|
(11,598 |
) |
|
|
28,472 |
|
|
|
(27,885 |
) |
|
|
38,259 |
|
Income taxes paid |
|
|
3,522 |
|
|
|
10,119 |
|
|
|
(540 |
) |
|
|
13,641 |
|
|
|
(2,220 |
) |
Net cash
provided (used) by operating activities |
|
|
38,139 |
|
|
|
89,614 |
|
|
|
(34,042 |
) |
|
|
127,753 |
|
|
|
(6,837 |
) |
Cash flows
from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and finance income
received |
|
|
85 |
|
|
|
254 |
|
|
|
486 |
|
|
|
339 |
|
|
|
876 |
|
Payments due
to investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of subsidiary |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other intangible assets |
|
|
— |
|
|
|
— |
|
|
|
(50 |
) |
|
|
— |
|
|
|
(184 |
) |
Property, plant and equipment |
|
|
(5,056 |
) |
|
|
(4,606 |
) |
|
|
(7,128 |
) |
|
|
(9,662 |
) |
|
|
(20,576 |
) |
Other |
|
|
— |
|
|
|
— |
|
|
|
(627 |
) |
|
|
— |
|
|
|
(627 |
) |
Disposals: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposal of subsidiaries |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-current assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other |
|
|
— |
|
|
|
— |
|
|
|
1,638 |
|
|
|
— |
|
|
|
3,397 |
|
Net cash
(used) provided by investing activities |
|
|
(4,971 |
) |
|
|
(4,352 |
) |
|
|
(5,681 |
) |
|
|
(9,323 |
) |
|
|
(17,114 |
) |
Cash flows
from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Payment for debt issuance
costs |
|
|
(279 |
) |
|
|
(1,576 |
) |
|
|
— |
|
|
|
(1,855 |
) |
|
|
(705 |
) |
Repayment of hydro leases |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Repayment of other financial
liabilities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Increase/(decrease) in bank
borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
|
— |
|
|
|
— |
|
|
|
39,649 |
|
|
|
— |
|
|
|
71,499 |
|
Payments |
|
|
(20,680 |
) |
|
|
(44,880 |
) |
|
|
(18,252 |
) |
|
|
(65,560 |
) |
|
|
(39,063 |
) |
Proceeds from stock option
exercises |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Amounts paid due to
leases |
|
|
(2,418 |
) |
|
|
(2,461 |
) |
|
|
(7,236 |
) |
|
|
(4,879 |
) |
|
|
(12,944 |
) |
Other amounts received/(paid)
due to financing activities |
|
|
— |
|
|
|
3,608 |
|
|
|
— |
|
|
|
3,608 |
|
|
|
— |
|
Payments to acquire or redeem
own shares |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Interest paid |
|
|
(1,131 |
) |
|
|
(18,824 |
) |
|
|
(3,341 |
) |
|
|
(19,955 |
) |
|
|
(21,849 |
) |
Net cash
(used) provided by financing activities |
|
|
(24,508 |
) |
|
|
(64,133 |
) |
|
|
10,820 |
|
|
|
(88,641 |
) |
|
|
(3,062 |
) |
Total net cash
flows for the period |
|
|
8,660 |
|
|
|
21,129 |
|
|
|
(28,903 |
) |
|
|
29,789 |
|
|
|
(27,013 |
) |
Beginning balance of cash and cash equivalents |
|
|
144,489 |
|
|
|
123,175 |
|
|
|
216,647 |
|
|
|
123,175 |
|
|
|
216,647 |
|
Exchange differences on cash and cash equivalents in foreign
currencies |
|
|
93 |
|
|
|
185 |
|
|
|
321 |
|
|
|
278 |
|
|
|
(1,589 |
) |
Ending balance
of cash and cash equivalents |
|
$ |
153,242 |
|
|
$ |
144,489 |
|
|
$ |
188,065 |
|
|
$ |
153,242 |
|
|
$ |
188,045 |
|
Cash from continuing
operations |
|
|
124,876 |
|
|
|
116,316 |
|
|
|
188,045 |
|
|
|
124,876 |
|
|
|
188,045 |
|
Non-current restricted cash
and cash equivalents |
|
|
28,366 |
|
|
|
28,173 |
|
|
|
— |
|
|
|
28,366 |
|
|
|
— |
|
Cash and
restricted cash in the statement of financial
position |
|
$ |
153,242 |
|
|
$ |
144,489 |
|
|
$ |
188,045 |
|
|
$ |
153,242 |
|
|
$ |
188,045 |
|
* While in previous periods Ferroglobe presented
interest paid as cash flows from operating activities, management
deems interest paid as among activities that alter the borrowing
structure of the Company and therefore most appropriately presented
as among financing activities. This change allows for a more fair
presentation of cash flow to users of the financial statements.
Previous periods have been restated in order to show interest paid
as net cash used in financing activities.
Adjusted EBITDA
($,000):
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
Six Months Ended |
|
Six Months Ended |
|
|
June 30, 2020 |
|
March 31, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
(Loss) profit attributable to the
parent |
|
$ |
(12,107 |
) |
|
$ |
(47,898 |
) |
|
$ |
(40,823 |
) |
|
$ |
(60,006 |
) |
|
$ |
(67,653 |
) |
(Loss) profit for the period
from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
963 |
|
|
|
— |
|
|
|
(3,354 |
) |
Loss (profit) attributable to
non-controlling interest |
|
|
(1,928 |
) |
|
|
(1,159 |
) |
|
|
(2,835 |
) |
|
|
(3,087 |
) |
|
|
(4,559 |
) |
Income tax (benefit)
expense |
|
|
(5,390 |
) |
|
|
(10,696 |
) |
|
|
(4,890 |
) |
|
|
(16,086 |
) |
|
|
(13,100 |
) |
Net finance expense |
|
|
16,693 |
|
|
|
16,484 |
|
|
|
15,047 |
|
|
|
33,177 |
|
|
|
28,870 |
|
Financial derivatives loss
(gain) |
|
|
— |
|
|
|
(3,168 |
) |
|
|
295 |
|
|
|
(3,168 |
) |
|
|
(969 |
) |
Exchange differences |
|
|
(2,633 |
) |
|
|
(2,436 |
) |
|
|
(5,080 |
) |
|
|
(5,069 |
) |
|
|
(3,601 |
) |
Depreciation and amortization
charges, operating allowances and write-downs |
|
|
27,459 |
|
|
|
28,668 |
|
|
|
30,204 |
|
|
|
56,127 |
|
|
|
60,574 |
|
EBITDA |
|
|
22,093 |
|
|
|
(20,205 |
) |
|
|
(7,119 |
) |
|
|
1,888 |
|
|
|
(3,792 |
) |
Impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Revaluation of biological
assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Contract termination
costs |
|
|
— |
|
|
|
— |
|
|
|
9,260 |
|
|
|
— |
|
|
|
9,260 |
|
Restructuring and termination
costs |
|
|
— |
|
|
|
— |
|
|
|
2,894 |
|
|
|
— |
|
|
|
2,894 |
|
Energy: France |
|
|
(55 |
) |
|
|
125 |
|
|
|
— |
|
|
|
70 |
|
|
|
— |
|
Energy: South Africa |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Staff Costs: South
Africa |
|
|
— |
|
|
|
155 |
|
|
|
— |
|
|
|
155 |
|
|
|
— |
|
Other Idling Costs |
|
|
375 |
|
|
|
2,308 |
|
|
|
— |
|
|
|
2,683 |
|
|
|
— |
|
(Loss)profit on disposal of
non-core businesses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted
EBITDA |
|
$ |
22,413 |
|
|
$ |
(17,617 |
) |
|
$ |
5,035 |
|
|
$ |
4,796 |
|
|
$ |
8,362 |
|
Adjusted profit attributable to
Ferroglobe ($,000):
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
Six Months Ended |
|
Six Months Ended |
|
|
June 30, 2020 |
|
March 31, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
(Loss) profit attributable to the
parent |
|
$ |
(12,107 |
) |
|
$ |
(47,898 |
) |
|
$ |
(40,823 |
) |
|
$ |
(60,006 |
) |
|
$ |
(67,653 |
) |
Tax rate adjustment |
|
|
826 |
|
|
|
8,425 |
|
|
|
10,337 |
|
|
|
9,250 |
|
|
|
15,273 |
|
Impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Revaluation of biological assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Contract termination costs |
|
|
— |
|
|
|
— |
|
|
|
6,297 |
|
|
|
— |
|
|
|
6,297 |
|
Restructuring and termination costs |
|
|
— |
|
|
|
— |
|
|
|
1,968 |
|
|
|
— |
|
|
|
1,968 |
|
Energy: France |
|
|
(37 |
) |
|
|
85 |
|
|
|
— |
|
|
|
48 |
|
|
|
— |
|
Energy: South Africa |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Staff Costs: South Africa |
|
|
— |
|
|
|
105 |
|
|
|
— |
|
|
|
105 |
|
|
|
— |
|
Other Idling Costs |
|
|
255 |
|
|
|
1,569 |
|
|
|
— |
|
|
|
1,824 |
|
|
|
— |
|
(Loss) profit on disposal of non-core businesses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted
(loss) profit attributable to the parent |
|
$ |
(11,064 |
) |
|
$ |
(37,714 |
) |
|
$ |
(22,221 |
) |
|
$ |
(48,777 |
) |
|
$ |
(44,115 |
) |
Adjusted diluted profit per
share:
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
Six Months Ended |
|
Six Months Ended |
|
|
June 30, 2020 |
|
March 31, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
Diluted (loss) profit per ordinary
share |
|
$ |
(0.07 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.40 |
) |
Tax rate adjustment |
|
|
0.00 |
|
|
|
0.05 |
|
|
|
0.06 |
|
|
|
0.05 |
|
|
|
0.09 |
|
Impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Revaluation of biological assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Contract termination costs |
|
|
— |
|
|
|
— |
|
|
|
0.04 |
|
|
|
— |
|
|
|
0.04 |
|
Restructuring and termination costs |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
Energy: France |
|
|
(0.00 |
) |
|
|
0.00 |
|
|
|
— |
|
|
|
0.00 |
|
|
|
— |
|
Energy: South Africa |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Staff Costs: South Africa |
|
|
— |
|
|
|
0.00 |
|
|
|
— |
|
|
|
0.00 |
|
|
|
— |
|
Other Idling Costs |
|
|
0.00 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
(Loss) profit on disposal of non-core businesses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted
diluted (loss) profit per ordinary share |
|
$ |
(0.07 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.26 |
) |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
|
|
Date: August 31,
2020 |
|
FERROGLOBE PLC |
|
|
|
|
by |
/s/
Marco Levi |
|
|
Name: Marco Levi |
|
|
Title: Chief Executive Officer
(Principal Executive Officer) |
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