Ferroglobe PLC (NASDAQ: GSM) (throughout, “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
2019.
Earnings
Highlights
In Q3 2019, Ferroglobe posted a net loss of
$(140.1) million, or $(0.83) per share on a fully diluted basis. On
an adjusted basis, Q3 2019 net loss was $(16.1) million, or $(0.10)
per share on a fully diluted basis.
Q3 2019 reported EBITDA was $(183.1) million, down
from $(7.1) million in the prior quarter. On an adjusted basis, Q3
2019 EBITDA was $(7.2) million, down from Q2 2019 adjusted EBITDA
of $5.0 million. The Company reported an adjusted EBITDA margin of
-1.9% for Q3 2019, compared to an adjusted EBITDA margin of 1.2%
for Q2 2019.
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Quarter Ended |
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Quarter Ended |
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Quarter Ended |
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Nine Months Ended |
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Nine Months Ended |
$,000
(unaudited) |
|
September 30, 2019 |
|
June 30, 2019 |
|
September 30, 2018 * |
|
September 30, 2019 |
|
September 30, 2018 * |
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Sales |
|
$ |
381,745 |
|
|
$ |
409,479 |
|
|
$ |
524,407 |
|
|
$ |
1,238,615 |
|
|
$ |
1,650,950 |
|
Net (loss) profit |
|
$ |
(140,139 |
) |
|
$ |
(43,658 |
) |
|
$ |
(2,916 |
) |
|
$ |
(212,351 |
) |
|
$ |
98,728 |
|
Diluted EPS |
|
$ |
(0.83 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.01 |
) |
|
$ |
(1.23 |
) |
|
$ |
0.60 |
|
Adjusted net (loss) income
attributable to the parent |
|
$ |
(16,085 |
) |
|
$ |
(22,221 |
) |
|
$ |
(135 |
) |
|
$ |
(60,200 |
) |
|
$ |
59,189 |
|
Adjusted diluted EPS |
|
$ |
(0.10 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.36 |
) |
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$ |
0.34 |
|
Adjusted EBITDA |
|
$ |
(7,210 |
) |
|
$ |
5,035 |
|
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$ |
43,864 |
|
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$ |
1,152 |
|
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$ |
206,867 |
|
Adjusted EBITDA margin |
|
|
-1.9 |
% |
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|
1.2 |
% |
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|
8.4 |
% |
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|
0.1 |
% |
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|
12.5 |
% |
* The amounts for prior periods have been restated
to reflect the impact of the profit / (loss) from discontinued
operations associated with the sale of the Company’s Spanish
hydroelectric plants
Pedro Larrea, Ferroglobe’s Chief Executive Officer
commented, “The overall market weakness has adversely impacted our
third quarter financials and is expected to linger for the
remainder of 2019.” Mr. Larrea continued, “Although we are
beginning to see some positive data points across our key products,
we continue to right-size our cost structure and production
platform in anticipation of demand and pricing uncertainty into
2020. The measures we are now taking are aimed at returning to
positive cash-flow, and these operational changes should also help
maximize our profitability as soon as the market environment
improves.”
Cash Flow and Balance
Sheet
Cash used in operations during Q3 2019
was $82.3 million, including a $66.2 million net movement in
respect of securitized accounts receivable and interest and tax
paid of $19.6 million.
Working capital increased from $410.4 million at
June 30, 2019 to $578.7 million at September 30, 2019, driven by an
increase in trade receivables of $181.7 million as a result of
consolidating trade receivables sold pursuant to the Company’s
accounts receivable securitization program. The securitized trade
receivables were consolidated due to an amendment to the program in
September 2019. Excluding the consolidation of the securitized
trade receivables, working capital decreased from $410.4 million to
$397.0 million.
Net debt was $368.3 million as of September 30,
2019, down from $478.3 million as of June 30, 2019.
Following a review of the carrying value of the
Company’s assets as of September 30, 2019, in the light of
prevailing market conditions, the Company has determined that the
value of goodwill with respect to the Company’s US and Canadian
operations has been impaired. Accordingly, we have recorded total
impairment charges of $174.0 million, with $143.2 million
allocated to Ferroglobe’s US operations and $30.8 million
allocated to the Canadian operations, resulting in a revised
goodwill carrying value of $29.7 million at September 30, 2019. A
further review will be undertaken at year end.
Beatriz García-Cos, Ferroglobe’s Chief Financial
Officer commented, “The entire management team is committed to
returning the Company to profitability and delivering a healthier
liquidity position and stronger balance sheet. The operational
changes support the financial strategy and will help us achieve
these goals.”
Successful closing of non-core asset
divestitures
FerroAtlántica, S.A.U.
On August 30, 2019, Ferroglobe successfully completed and closed
the previously-announced sale of its 100% interest in subsidiary
FerroAtlántica, S.A.U. (“FerroAtlántica”), which includes ten
hydroelectric power plants and the Cee-Dumbria ferroalloys factory,
to affiliates of TPG Sixth Street Partners. The transaction,
valued at €170 million ($189.0 million), provided the Company with
gross proceeds of €154.0 million ($171.2 million), after closing
adjustments.
Ultracore Polska ZOO
On September 28, 2019, Ferroglobe closed on the sale of its
subsidiary Ultracore Polska ZOO, which manufactures cored wire in
Poland, for net proceeds of $2.2 million.
Timberlands in South
Africa
On October 4, 2019, Ferroglobe subsidiary, Silicon Smelters
(Pty.) Ltd. completed the sale of its remaining timberlands in
South Africa for net proceeds of ZAR 130 million ($8.58
million)
Pedro Larrea commented, “Non-core asset divestitures have been
an important element of our cash generation initiatives this
year. Of the assets we previously announced for sale, we have
now closed on all but one transaction. The sale process for
our French energy assets continues and will likely carry into next
year. Additionally, we are reviewing our portfolio for additional
assets which could be deemed non-core to the business and will
provide an update should we move forward with any other
disposals.”
Other recent developments
Ferroglobe continues to make progress with various initiatives
to ‘right-size’ its operational footprint and enhance its financial
position. These initiatives are aimed at balancing production with
demand, improving the Company’s cost structure and generating
cash.
On October 4, 2019, Ferroglobe announced further adjustments to
its global production platform, to streamline operations, adapt
production to reduced demand and release cash through the workdown
of inventory. The announced changes reduce the Company’s global
production capacity for silicon metal, silicon-based alloys and
manganese-based alloys. In France, the Chateau-Feuillet, Montricher
and Laudun facilities will reduce production. In North America, the
Bécancour, Quebec and Bridgeport, Alabama facilities will reduce
production in the near-term.
Most recently the Company has undertaken an extended outage at
its Mo I Rana facility in Norway. Both furnaces (producing
manganese alloys) were idled on October 28, 2019. Customer orders
from this plant have been shifted to the other facilities in order
to optimize the Company’s utilization, logistics and overall
economics.
In the aggregate these measures will reduce the Company’s
immediate production capacity across all major product categories.
With these operational changes, Ferroglobe’s current silicon metal
capacity (annualized run-rate) will decline to 186,000 tons, down
56,000 tons from 242,000 tons at the end of Q3 2019. Silicon-based
alloys capacity will decline to 354,000 tons, down 88,000 tons from
442,000 tons at the end of Q3 2019. Lastly, the Company’s
manganese-based alloys capacity will decline to 538,000 tons, down
125,000 tons from 663,000 tons at the end of Q3 2019.
On October 11, 2019, Ferroglobe completed the closing of a new
five year $100 million North American asset-based revolving credit
facility (“ABL”), replacing the Company’s revolving credit facility
(“RCF”). The replacement of the RCF marks an important step in the
Company’s overall strategy to de-risk the balance sheet. The new
ABL has no leverage-based or financial-based covenants and offers
reduced liquidity requirements as compared to the prior RCF,
thereby enhancing the Company’s flexibility.
Discussion of Third Quarter 2019
Results
Sales
Sales for Q3 2019 were $381.7 million, a decrease
of 6.8% compared to $409.5 million in Q2 2019. For Q3 2019, total
shipments were down 3.8% and the average selling price was down
3.5% compared with Q2 2019.
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Quarter Ended |
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Quarter Ended |
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Quarter Ended |
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Nine Months Ended |
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Nine Months Ended |
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September 30, 2019 |
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June 30, 2019 |
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Change |
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September 30, 2018 |
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Change |
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September 30, 2019 |
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September 30, 2018 |
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Change |
Shipments in
metric tons: |
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Silicon Metal |
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60,225 |
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|
54,084 |
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11.4 |
% |
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|
81,686 |
|
-26.3 |
% |
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176,578 |
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259,214 |
|
-31.9 |
% |
Silicon-based Alloys |
|
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69,879 |
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79,264 |
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-11.8 |
% |
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75,964 |
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-8.0 |
% |
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230,944 |
|
|
230,506 |
|
0.2 |
% |
Manganese-based Alloys |
|
|
93,996 |
|
|
99,555 |
|
-5.6 |
% |
|
|
98,280 |
|
-4.4 |
% |
|
|
297,221 |
|
|
276,913 |
|
7.3 |
% |
Total shipments* |
|
|
224,100 |
|
|
232,903 |
|
-3.8 |
% |
|
|
255,930 |
|
-12.4 |
% |
|
|
704,743 |
|
|
766,633 |
|
-8.1 |
% |
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Average
selling price ($/MT): |
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|
Silicon Metal |
|
$ |
2,175 |
|
$ |
2,320 |
|
-6.3 |
% |
|
$ |
2,636 |
|
-17.5 |
% |
|
$ |
2,284 |
|
$ |
2,726 |
|
-16.2 |
% |
Silicon-based Alloys |
|
$ |
1,490 |
|
$ |
1,572 |
|
-5.2 |
% |
|
$ |
1,802 |
|
-17.3 |
% |
|
$ |
1,582 |
|
$ |
1,889 |
|
-16.3 |
% |
Manganese-based Alloys |
|
$ |
1,140 |
|
$ |
1,188 |
|
-4.0 |
% |
|
$ |
1,211 |
|
-5.9 |
% |
|
$ |
1,167 |
|
$ |
1,289 |
|
-9.5 |
% |
Total* |
|
$ |
1,527 |
|
$ |
1,582 |
|
-3.5 |
% |
|
$ |
1,841 |
|
-17.1 |
% |
|
$ |
1,583 |
|
$ |
1,955 |
|
-19.0 |
% |
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Average
selling price ($/lb.): |
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Silicon Metal |
|
$ |
0.99 |
|
$ |
1.05 |
|
-6.3 |
% |
|
$ |
1.20 |
|
-17.5 |
% |
|
$ |
1.04 |
|
$ |
1.24 |
|
-16.2 |
% |
Silicon-based Alloys |
|
$ |
0.68 |
|
$ |
0.71 |
|
-5.2 |
% |
|
$ |
0.82 |
|
-17.3 |
% |
|
$ |
0.72 |
|
$ |
0.86 |
|
-16.3 |
% |
Manganese-based Alloys |
|
$ |
0.52 |
|
$ |
0.54 |
|
-4.0 |
% |
|
$ |
0.55 |
|
-5.9 |
% |
|
$ |
0.53 |
|
$ |
0.58 |
|
-9.5 |
% |
Total* |
|
$ |
0.69 |
|
$ |
0.72 |
|
-3.5 |
% |
|
$ |
0.84 |
|
-17.1 |
% |
|
$ |
0.72 |
|
$ |
0.89 |
|
-19.0 |
% |
* Excludes by-products and other
Sales Prices & Volumes By
Product
During Q3 2019, total product average selling
prices decreased by 3.5% versus Q2 2019. Q3 average selling prices
of silicon metal decreased 6.3%, silicon-based alloys decreased
5.2%, and manganese-based alloys decreased 4.0%. Sales volumes in
Q3 declined by 3.8% versus the prior quarter. Q3 sales
volumes of silicon metal increased 11.4%, silicon-based alloys
decreased 11.8%, and manganese-based alloys decreased 5.6% versus
Q2 2019.
Cost of Sales
Cost of sales was $277.7 million in Q3 2019, a decrease from
$292.4 million in the prior quarter. Cost of sales as a percentage
of sales increased to 72.8% in Q3 2019 versus 71.4% for Q2
2019.
Other Operating
Expenses
Other operating expenses was $50.1 million in Q3 2019, a
decrease from $62.9 million in the prior quarter, primarily due to
contract termination costs incurred in Q2 2019 related to the solar
joint venture.
Net Loss Attributable to the
Parent
In Q3 2019, net loss attributable to the Parent was $140.5
million, or $(0.83) per diluted share, compared to a net loss
attributable to the Parent of $40.8 million, or $(0.24) per diluted
share in Q2 2019.
Adjusted
EBITDA
In Q3 2019, adjusted EBITDA was $(7.2) million, or -1.9% of
sales, compared to adjusted EBITDA of $5.0 million, or 1.2% of
sales in Q2 2019.
Conference
Call
Ferroglobe management will review the third quarter results
of 2019 during a conference call at 9:00 a.m. Eastern Time
on December 3, 2019.
The dial-in number for participants in the United
States is 877‑293‑5491 (conference ID 5768864). International
callers should dial +1 914‑495‑8526 (conference ID 5768864). 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/8nkuu92x.
About Ferroglobe
Ferroglobe is one of the world’s leading suppliers of
silicon metal, silicon-based and manganese-based specialty alloys
and other 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
Ferroglobe PLC and
SubsidiariesUnaudited Condensed
Consolidated Income Statement(in
thousands of U.S. dollars, except per share
amounts)
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|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
Nine Months Ended |
|
Nine Months Ended |
|
|
September 30, 2019 |
|
June 30, 2019 |
|
September 30, 2018* |
|
September 30, 2019 |
|
September 30, 2018* |
Sales |
|
$ |
381,745 |
|
|
$ |
409,479 |
|
|
$ |
524,407 |
|
|
$ |
1,238,615 |
|
|
$ |
1,650,950 |
|
Cost of sales |
|
|
(277,692 |
) |
|
|
(292,432 |
) |
|
|
(334,340 |
) |
|
|
(899,492 |
) |
|
|
(998,629 |
) |
Other operating income |
|
|
13,215 |
|
|
|
14,530 |
|
|
|
5,630 |
|
|
|
41,766 |
|
|
|
20,925 |
|
Staff costs |
|
|
(72,536 |
) |
|
|
(74,852 |
) |
|
|
(88,134 |
) |
|
|
(221,651 |
) |
|
|
(258,206 |
) |
Other operating expense |
|
|
(50,060 |
) |
|
|
(62,924 |
) |
|
|
(63,920 |
) |
|
|
(166,901 |
) |
|
|
(207,223 |
) |
Depreciation and amortization charges, operating allowances and
write-downs |
|
|
(29,591 |
) |
|
|
(30,204 |
) |
|
|
(29,587 |
) |
|
|
(90,165 |
) |
|
|
(85,492 |
) |
Bargain purchase gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
44,633 |
|
Other (loss) gain |
|
|
(3,774 |
) |
|
|
275 |
|
|
|
221 |
|
|
|
(3,896 |
) |
|
|
2,936 |
|
Operating (loss) profit before impairment
losses |
|
|
(38,693 |
) |
|
|
(36,128 |
) |
|
|
14,277 |
|
|
|
(101,724 |
) |
|
|
169,894 |
|
Impairment losses |
|
|
(174,018 |
) |
|
|
(1,195 |
) |
|
|
— |
|
|
|
(175,353 |
) |
|
|
— |
|
Operating (loss) profit |
|
|
(212,711 |
) |
|
|
(37,323 |
) |
|
|
14,277 |
|
|
|
(277,077 |
) |
|
|
169,894 |
|
Net finance expense |
|
|
(16,491 |
) |
|
|
(15,047 |
) |
|
|
(12,992 |
) |
|
|
(45,361 |
) |
|
|
(38,292 |
) |
Financial derivatives (loss) gain |
|
|
2,913 |
|
|
|
(295 |
) |
|
|
388 |
|
|
|
3,882 |
|
|
|
1,455 |
|
Exchange differences |
|
|
(5,083 |
) |
|
|
5,080 |
|
|
|
(3,071 |
) |
|
|
(1,482 |
) |
|
|
(11,050 |
) |
(Loss) profit before tax |
|
|
(231,372 |
) |
|
|
(47,585 |
) |
|
|
(1,398 |
) |
|
|
(320,038 |
) |
|
|
122,007 |
|
Income tax benefit (expense) |
|
|
14,322 |
|
|
|
4,890 |
|
|
|
(663 |
) |
|
|
27,422 |
|
|
|
(28,350 |
) |
(Loss) profit for the period from continuing
operations |
|
|
(217,050 |
) |
|
|
(42,695 |
) |
|
|
(2,061 |
) |
|
|
(292,616 |
) |
|
|
93,657 |
|
Profit (loss) for the period from discontinued operations |
|
|
76,911 |
|
|
|
(963 |
) |
|
|
(855 |
) |
|
|
80,265 |
|
|
|
5,071 |
|
(Loss) profit for the
period |
|
|
(140,139 |
) |
|
|
(43,658 |
) |
|
|
(2,916 |
) |
|
|
(212,351 |
) |
|
|
98,728 |
|
Loss attributable to non-controlling interest |
|
|
(385 |
) |
|
|
2,835 |
|
|
|
1,671 |
|
|
|
4,174 |
|
|
|
4,145 |
|
(Loss) profit attributable to the
parent |
|
$ |
(140,524 |
) |
|
$ |
(40,823 |
) |
|
$ |
(1,245 |
) |
|
$ |
(208,177 |
) |
|
$ |
102,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
(183,120 |
) |
|
$ |
(7,119 |
) |
|
$ |
43,864 |
|
|
$ |
(186,912 |
) |
|
$ |
255,386 |
|
Adjusted EBITDA |
|
$ |
(7,210 |
) |
|
$ |
5,035 |
|
|
$ |
43,864 |
|
|
$ |
1,152 |
|
|
$ |
206,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
169,123 |
|
|
|
169,123 |
|
|
|
171,935 |
|
|
|
169,123 |
|
|
|
171,966 |
|
Diluted |
|
|
169,123 |
|
|
|
169,123 |
|
|
|
171,935 |
|
|
|
169,123 |
|
|
|
172,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) profit
per ordinary share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.83 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.01 |
) |
|
$ |
(1.23 |
) |
|
$ |
0.60 |
|
Diluted |
|
$ |
(0.83 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.01 |
) |
|
$ |
(1.23 |
) |
|
$ |
0.60 |
|
* The amounts for prior periods have been restated to reflect
the impact of the profit / (loss) from discontinued operations
associated with the sale of the Company’s Spanish hydroelectric
plants.
Ferroglobe PLC and
SubsidiariesUnaudited Condensed
Consolidated Statement of Financial
Position(in thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
December 31, |
|
|
2019 |
|
2019 |
|
2018 |
ASSETS |
Non-current assets |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
$ |
|
29,702 |
|
$ |
204,089 |
|
$ |
202,848 |
Other intangible assets |
|
|
|
63,980 |
|
|
62,778 |
|
|
51,822 |
Property, plant and equipment |
|
|
|
742,752 |
|
|
784,272 |
|
|
888,862 |
Other non-current financial assets |
|
|
|
3,381 |
|
|
20,042 |
|
|
70,343 |
Deferred tax assets |
|
|
|
50,214 |
|
|
22,915 |
|
|
14,589 |
Non-current receivables from related parties |
|
|
|
2,178 |
|
|
2,276 |
|
|
2,288 |
Other non-current assets |
|
|
|
1,780 |
|
|
9,746 |
|
|
10,486 |
Non-current restricted cash and cash equivalents |
|
|
|
10,889 |
|
|
— |
|
|
— |
Total non-current assets |
|
|
|
904,876 |
|
|
1,106,118 |
|
|
1,241,238 |
Current assets |
|
|
|
|
|
|
|
|
|
|
Inventories |
|
|
|
479,866 |
|
|
504,527 |
|
|
456,970 |
Trade and other receivables |
|
|
|
332,603 |
|
|
158,252 |
|
|
155,996 |
Current receivables from related parties |
|
|
|
2,839 |
|
|
3,000 |
|
|
14,226 |
Current income tax assets |
|
|
|
41,649 |
|
|
31,610 |
|
|
27,404 |
Other current financial assets |
|
|
|
1,660 |
|
|
7,840 |
|
|
2,523 |
Other current assets |
|
|
|
12,157 |
|
|
12,289 |
|
|
8,813 |
Cash and cash equivalents * |
|
|
|
177,154 |
|
|
187,673 |
|
|
216,647 |
Assets and disposal groups classified as held for sale |
|
|
|
8,507 |
|
|
97,862 |
|
|
— |
Total current assets |
|
|
|
1,056,435 |
|
|
1,003,053 |
|
|
882,579 |
Total assets |
|
$ |
|
1,961,311 |
|
$ |
2,109,171 |
|
$ |
2,123,817 |
|
|
|
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES |
Equity |
|
$ |
|
664,300 |
|
$ |
816,080 |
|
$ |
884,372 |
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
Deferred income |
|
|
|
4,061 |
|
|
8,108 |
|
|
1,434 |
Provisions |
|
|
|
78,272 |
|
|
80,218 |
|
|
75,787 |
Bank borrowings |
|
|
|
130,622 |
|
|
— |
|
|
132,821 |
Lease liabilities |
|
|
|
16,417 |
|
|
18,629 |
|
|
53,472 |
Debt instruments |
|
|
|
343,400 |
|
|
342,806 |
|
|
341,657 |
Other financial liabilities |
|
|
|
10,307 |
|
|
24,585 |
|
|
32,788 |
Other non-current liabilities |
|
|
|
29,982 |
|
|
25,246 |
|
|
25,030 |
Deferred tax liabilities |
|
|
|
82,192 |
|
|
64,520 |
|
|
77,379 |
Total non-current
liabilities |
|
|
|
695,253 |
|
|
564,112 |
|
|
740,368 |
Current liabilities |
|
|
|
|
|
|
|
|
|
|
Provisions |
|
|
|
51,667 |
|
|
44,007 |
|
|
40,570 |
Bank borrowings |
|
|
|
130,272 |
|
|
172,890 |
|
|
8,191 |
Lease liabilities |
|
|
|
8,218 |
|
|
8,692 |
|
|
12,999 |
Debt instruments |
|
|
|
2,734 |
|
|
10,938 |
|
|
10,937 |
Other financial liabilities |
|
|
|
49,978 |
|
|
52,594 |
|
|
52,524 |
Payables to related parties |
|
|
|
9,160 |
|
|
9,884 |
|
|
11,128 |
Trade and other payables |
|
|
|
233,811 |
|
|
252,372 |
|
|
256,823 |
Current income tax liabilities |
|
|
|
11,173 |
|
|
1,766 |
|
|
2,335 |
Other current liabilities |
|
|
|
104,745 |
|
|
95,150 |
|
|
103,570 |
Liabilities associated with assets classified as held for sale |
|
|
|
— |
|
|
80,686 |
|
|
— |
Total current
liabilities |
|
|
|
601,758 |
|
|
728,979 |
|
|
499,077 |
Total equity and
liabilities |
|
$ |
|
1,961,311 |
|
$ |
2,109,171 |
|
$ |
2,123,817 |
* Cash and cash equivalents include current restricted cash of
$42,834 at September 30, 2019 ($nil at June 30, 2019 and December
31, 2018)
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, 2019 |
|
June 30, 2019 |
|
September 30, 2018 |
|
|
September 30, 2019 |
|
September 30, 2018 |
Cash flows
from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) profit for the period |
|
$ |
(140,139 |
) |
|
$ |
(43,658 |
) |
|
$ |
(2,916 |
) |
|
|
$ |
(212,351 |
) |
|
$ |
98,728 |
|
Adjustments to
reconcile net (loss) profit to net cash used by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense |
|
|
(14,489 |
) |
|
|
(5,215 |
) |
|
|
573 |
|
|
|
|
(26,408 |
) |
|
|
30,543 |
|
Depreciation and amortization charges, operating allowances and
write-downs |
|
|
29,591 |
|
|
|
31,327 |
|
|
|
30,750 |
|
|
|
|
92,995 |
|
|
|
89,075 |
|
Net finance expense |
|
|
20,893 |
|
|
|
16,145 |
|
|
|
13,952 |
|
|
|
|
51,794 |
|
|
|
41,520 |
|
Financial derivatives loss (gain) |
|
|
(2,913 |
) |
|
|
295 |
|
|
|
(388 |
) |
|
|
|
(3,882 |
) |
|
|
(1,455 |
) |
Exchange differences |
|
|
5,083 |
|
|
|
(5,080 |
) |
|
|
3,071 |
|
|
|
|
1,482 |
|
|
|
11,050 |
|
Impairment losses |
|
|
174,018 |
|
|
|
1,195 |
|
|
|
— |
|
|
|
|
175,353 |
|
|
|
— |
|
Bargain purchase gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
(44,633 |
) |
Gain on disposal of discontinued operation |
|
|
(80,729 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
(80,729 |
) |
|
|
— |
|
Share-based compensation |
|
|
1,015 |
|
|
|
933 |
|
|
|
1,050 |
|
|
|
|
3,280 |
|
|
|
1,782 |
|
Other adjustments |
|
|
3,774 |
|
|
|
(275 |
) |
|
|
(221 |
) |
|
|
|
3,896 |
|
|
|
(2,936 |
) |
Changes in
operating assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in inventories |
|
|
5,953 |
|
|
|
(46,950 |
) |
|
|
(25,666 |
) |
|
|
|
(40,962 |
) |
|
|
(192,197 |
) |
(Increase) decrease in trade receivables |
|
|
5,568 |
|
|
|
(32,316 |
) |
|
|
6,224 |
|
|
|
|
1,623 |
|
|
|
(13,546 |
) |
Increase (decrease) in trade payables |
|
|
(10,693 |
) |
|
|
21,625 |
|
|
|
(21,213 |
) |
|
|
|
(12,035 |
) |
|
|
49,638 |
|
Other |
|
|
(59,689 |
) |
|
|
28,472 |
|
|
|
10,543 |
|
|
|
|
(21,430 |
) |
|
|
(32,410 |
) |
Income taxes paid |
|
|
(846 |
) |
|
|
(540 |
) |
|
|
(5,257 |
) |
|
|
|
(3,066 |
) |
|
|
(29,425 |
) |
Interest paid |
|
|
(18,713 |
) |
|
|
(3,341 |
) |
|
|
(18,400 |
) |
|
|
|
(40,562 |
) |
|
|
(38,658 |
) |
Net cash
(used) provided by operating activities |
|
|
(82,316 |
) |
|
|
(37,383 |
) |
|
|
(7,898 |
) |
|
|
|
(111,002 |
) |
|
|
(32,924 |
) |
Cash flows
from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and finance income
received |
|
|
626 |
|
|
|
486 |
|
|
|
638 |
|
|
|
|
1,502 |
|
|
|
2,990 |
|
Payments due
to investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of subsidiary |
|
|
9,088 |
|
|
|
— |
|
|
|
— |
|
|
|
|
9,088 |
|
|
|
(20,379 |
) |
Other intangible assets |
|
|
— |
|
|
|
(50 |
) |
|
|
(149 |
) |
|
|
|
(184 |
) |
|
|
(3,073 |
) |
Property, plant and equipment |
|
|
(6,269 |
) |
|
|
(7,128 |
) |
|
|
(25,696 |
) |
|
|
|
(26,845 |
) |
|
|
(78,005 |
) |
Other |
|
|
— |
|
|
|
(627 |
) |
|
|
— |
|
|
|
|
(627 |
) |
|
|
(8 |
) |
Disposals: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposal of subsidiaries |
|
|
171,058 |
|
|
|
— |
|
|
|
— |
|
|
|
|
171,058 |
|
|
|
— |
|
Other non-current assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
12,734 |
|
Other |
|
|
19 |
|
|
|
1,638 |
|
|
|
947 |
|
|
|
|
3,416 |
|
|
|
6,861 |
|
Net cash used
by investing activities |
|
|
174,522 |
|
|
|
(5,681 |
) |
|
|
(24,260 |
) |
|
|
|
157,408 |
|
|
|
(78,880 |
) |
Cash flows
from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid |
|
|
— |
|
|
|
— |
|
|
|
(10,321 |
) |
|
|
|
— |
|
|
|
(20,642 |
) |
Payment for debt issuance
costs |
|
|
(2,093 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
(2,798 |
) |
|
|
(4,476 |
) |
Repayment of hydro leases |
|
|
(55,352 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
(55,352 |
) |
|
|
— |
|
Repayment of other financial
liabilities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
(33,096 |
) |
Increase/(decrease) in bank
borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
|
— |
|
|
|
39,649 |
|
|
|
25,286 |
|
|
|
|
71,499 |
|
|
|
245,318 |
|
Payments |
|
|
(21,038 |
) |
|
|
(18,252 |
) |
|
|
— |
|
|
|
|
(60,101 |
) |
|
|
(106,514 |
) |
Proceeds from stock option
exercises |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
240 |
|
Other amounts paid due to
financing activities |
|
|
(9,324 |
) |
|
|
(7,236 |
) |
|
|
(3,067 |
) |
|
|
|
(22,268 |
) |
|
|
(10,702 |
) |
Payments to acquire or redeem
own shares |
|
|
— |
|
|
|
— |
|
|
|
(3,502 |
) |
|
|
|
— |
|
|
|
(3,502 |
) |
Net cash
provided (used) by financing activities |
|
|
(87,807 |
) |
|
|
14,161 |
|
|
|
8,396 |
|
|
|
|
(69,020 |
) |
|
|
66,626 |
|
Total net cash
flows for the period |
|
|
4,399 |
|
|
|
(28,903 |
) |
|
|
(23,762 |
) |
|
|
|
(22,614 |
) |
|
|
(45,178 |
) |
Beginning balance of cash and cash equivalents |
|
|
188,045 |
|
|
|
216,627 |
|
|
|
155,984 |
|
|
|
|
216,647 |
|
|
|
184,472 |
|
Exchange differences on cash and cash equivalents in foreign
currencies |
|
|
(4,401 |
) |
|
|
321 |
|
|
|
(551 |
) |
|
|
|
(5,990 |
) |
|
|
(7,623 |
) |
Ending balance
of cash and cash equivalents |
|
$ |
188,043 |
|
|
$ |
188,045 |
|
|
$ |
131,671 |
|
|
|
$ |
188,043 |
|
|
$ |
131,671 |
|
Cash from continuing
operations |
|
|
177,154 |
|
|
|
187,673 |
|
|
|
131,671 |
|
|
|
|
177,154 |
|
|
|
131,671 |
|
Non-current restricted cash
and cash equivalents |
|
|
10,889 |
|
|
|
— |
|
|
|
— |
|
|
|
|
10,889 |
|
|
|
— |
|
Cash held for sale |
|
|
— |
|
|
|
372 |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Cash and
restricted cash in the statement of financial
position |
|
$ |
188,043 |
|
|
$ |
188,045 |
|
|
$ |
131,671 |
|
|
|
$ |
188,043 |
|
|
$ |
131,671 |
|
Adjusted EBITDA
($,000):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
Nine Months Ended |
|
Nine Months Ended |
|
|
September 30, 2019 |
|
June 30, 2019 |
|
September 30, 2018 |
|
September 30, 2019 |
|
September 30, 2018 |
(Loss) profit attributable to the
parent |
|
$ |
(140,524 |
) |
|
$ |
(40,823 |
) |
|
$ |
(1,245 |
) |
|
$ |
(208,177 |
) |
|
$ |
102,873 |
|
Loss (profit) for the period
from discontinued operations |
|
|
(76,911 |
) |
|
|
963 |
|
|
|
855 |
|
|
|
(80,265 |
) |
|
|
(5,071 |
) |
Loss attributable to
non-controlling interest |
|
|
385 |
|
|
|
(2,835 |
) |
|
|
(1,671 |
) |
|
|
(4,174 |
) |
|
|
(4,145 |
) |
Income tax (benefit)
expense |
|
|
(14,322 |
) |
|
|
(4,890 |
) |
|
|
663 |
|
|
|
(27,422 |
) |
|
|
28,350 |
|
Net finance expense |
|
|
16,491 |
|
|
|
15,047 |
|
|
|
12,992 |
|
|
|
45,361 |
|
|
|
38,292 |
|
Financial derivatives loss
(gain) |
|
|
(2,913 |
) |
|
|
295 |
|
|
|
(388 |
) |
|
|
(3,882 |
) |
|
|
(1,455 |
) |
Exchange differences |
|
|
5,083 |
|
|
|
(5,080 |
) |
|
|
3,071 |
|
|
|
1,482 |
|
|
|
11,050 |
|
Depreciation and amortization
charges, operating allowances and write-downs |
|
|
29,591 |
|
|
|
30,204 |
|
|
|
29,587 |
|
|
|
90,165 |
|
|
|
85,492 |
|
EBITDA |
|
|
(183,120 |
) |
|
|
(7,119 |
) |
|
|
43,864 |
|
|
|
(186,912 |
) |
|
|
255,386 |
|
Impairment |
|
|
174,008 |
|
|
|
— |
|
|
|
— |
|
|
|
174,008 |
|
|
|
— |
|
Revaluation of biological
assets |
|
|
1,080 |
|
|
|
— |
|
|
|
— |
|
|
|
1,080 |
|
|
|
— |
|
Contract termination
costs |
|
|
— |
|
|
|
9,260 |
|
|
|
— |
|
|
|
9,260 |
|
|
|
— |
|
Restructuring and termination
costs |
|
|
— |
|
|
|
2,894 |
|
|
|
— |
|
|
|
2,894 |
|
|
|
— |
|
Loss on disposal of non-core
businesses |
|
|
822 |
|
|
|
— |
|
|
|
— |
|
|
|
822 |
|
|
|
— |
|
Bargain purchase gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(44,633 |
) |
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,886 |
) |
Adjusted
EBITDA |
|
$ |
(7,210 |
) |
|
$ |
5,035 |
|
|
$ |
43,864 |
|
|
$ |
1,152 |
|
|
$ |
206,867 |
|
Adjusted profit attributable to
Ferroglobe ($,000):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
Nine Months Ended |
|
Nine Months Ended |
|
|
September 30, 2019 |
|
June 30, 2019 |
|
September 30, 2018 |
|
September 30, 2019 |
|
September 30, 2018 |
(Loss) profit attributable to the
parent |
|
$ |
(140,524 |
) |
|
$ |
(40,823 |
) |
|
$ |
(1,245 |
) |
|
$ |
(208,177 |
) |
|
$ |
102,873 |
|
Tax rate adjustment |
|
|
59,717 |
|
|
|
10,337 |
|
|
|
1,110 |
|
|
|
74,990 |
|
|
|
(10,692 |
) |
Impairment |
|
|
118,325 |
|
|
|
— |
|
|
|
— |
|
|
|
118,325 |
|
|
|
— |
|
Revaluation of biological assets |
|
|
734 |
|
|
|
— |
|
|
|
— |
|
|
|
734 |
|
|
|
— |
|
Contract termination costs |
|
|
— |
|
|
|
6,297 |
|
|
|
— |
|
|
|
6,297 |
|
|
|
— |
|
Restructuring and termination costs |
|
|
— |
|
|
|
1,968 |
|
|
|
— |
|
|
|
1,968 |
|
|
|
— |
|
Profit on disposal of non-core businesses |
|
|
(54,337 |
) |
|
|
— |
|
|
|
— |
|
|
|
(54,337 |
) |
|
|
— |
|
Bargain purchase gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(30,350 |
) |
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,642 |
) |
Adjusted
(loss) profit attributable to the parent |
|
$ |
(16,085 |
) |
|
$ |
(22,221 |
) |
|
$ |
(135 |
) |
|
$ |
(60,200 |
) |
|
$ |
59,189 |
|
Adjusted diluted profit per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
Nine Months Ended |
|
Nine Months Ended |
|
|
September 30, 2019 |
|
June 30, 2019 |
|
September 30, 2018 |
|
September 30, 2019 |
|
September 30, 2018 |
Diluted (loss) profit per ordinary
share |
|
$ |
(0.83 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.01 |
) |
|
$ |
(1.23 |
) |
|
$ |
0.60 |
|
Tax rate adjustment |
|
|
0.35 |
|
|
|
0.06 |
|
|
|
0.01 |
|
|
|
0.44 |
|
|
|
(0.06 |
) |
Impairment |
|
|
0.70 |
|
|
|
— |
|
|
|
— |
|
|
|
0.70 |
|
|
|
— |
|
Revaluation of biological assets |
|
|
0.00 |
|
|
|
— |
|
|
|
— |
|
|
|
0.00 |
|
|
|
— |
|
Contract termination costs |
|
|
— |
|
|
|
0.04 |
|
|
|
— |
|
|
|
0.04 |
|
|
|
— |
|
Restructuring and termination costs |
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
Loss on disposal of non-core businesses |
|
|
(0.32 |
) |
|
|
— |
|
|
|
— |
|
|
|
(0.32 |
) |
|
|
— |
|
Bargain purchase gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.18 |
) |
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.02 |
) |
Adjusted
diluted (loss) profit per ordinary share |
|
$ |
(0.10 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.36 |
) |
|
$ |
0.34 |
|
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