Elkem

Earnings Release • Apr 18, 2024

First quarter 2024 - EBITDA improvement from modest levels

First quarter 2024 - EBITDA improvement from modest levels

Oslo, 18 April 2024

Elkem's EBITDA in the first quarter 2024 improved compared to the preceding two

quarters despite challenging market conditions. Commodity sales prices have

improved during the quarter, but demand is still weak. There are signs of demand

recovery, but the uncertainty is still significant.

Elkem's total operating income for the first quarter 2024 was NOK 7,961 million,

which was in line with the preceding quarters, but down 18% from the first

quarter 2023. Earnings before interest, taxes, depreciation and amortisation

(EBITDA) was NOK 721 million, which was up from the previous two quarters, but

down from the first quarter 2023. Earnings per share (EPS) was NOK -0.69 in the

quarter, impacted by negative mark-to-market effects.

The result for the Silicones division was hampered by weak market conditions and

Chinese seasonality. The division presented a negative EBITDA contribution in

quarter, but there are signs that demand is picking up. The Silicon Products

divisions delivered improved results compared to the preceding two quarters,

benefitting from higher sales prices for silicon and ferrosilicon and continued

strong performance from specialty segments. The Carbon Solutions division

delivered another strong result, despite low sales volume.

"The macro-economic sentiment has been challenging in 2023, characterised by

high inflation, interest rate hikes, and geopolitical uncertainties. The global

macro-economic outlook for 2024 is still modest," says Elkem CEO Helge Aasen.

To counter challenging market conditions, Elkem has introduced a comprehensive

improvement programme. The target is to improve EBITDA by at least NOK 1.5

billion and to reduce capital expenditures by NOK 2.0 billion compared to 2023.

The programme is well underway. In the first quarter Elkem realised EBITDA

improvements of NOK 0.2 billion, with an estimated full-year effect for 2024 of

NOK 0.8 billion. Elkem's capital expenditures in the first quarter was down to

NOK 0.6 billion, providing a clear trajectory to reach target. In line with the

plan to reduce capital expenditures, Elkem has decided to exit its investment in

Vianode.

"In the first quarter 2024, Elkem signed a new long-term power contract in

Norway. The contract is for nine years and expire end of 2035. Elkem is well

-positioned with long-term power contracts in Norway with around 80% of the

electricity supply secured until end of 2027," says Aasen.

The group's equity as at 31 March 2024 amounted to NOK 24,743 million, which

gave a ratio of equity to total assets of 49%. Net interest-bearing debt was NOK

10,206 million, which gave a ratio of net interest-bearing debt to EBITDA of

3.5x. Elkem had cash and cash equivalents of NOK 5,849 million as at 31 March

2024, and undrawn credit lines of more than NOK 6,000 million.

"There have been signs of recovery in the first quarter, but the uncertainty is

still significant. The demand for silicones in Europe and US show signs of

picking up. There is improved demand also in China, but the price development is

hampered by overcapacity," says Aasen.

Elkem's expansion in China will come on stream in May, but the financial impact

is limited in the second quarter. Silicon Products is expected to benefit from

the commodity price increases for silicon and ferrosilicon seen in the first

quarter. Stable conditions are expected for Carbon Solutions, with some signs of

demand improvement in specific markets.

For further information, please contact:

Odd-Geir Lyngstad

VP Finance & Investor Relations

Tel: +47 976 72 806

Email: odd-geir.lyngstad@elkem.com

Maria Ekornes Myhre

Acting VP Corporate Communications and Public Affairs

Tel: +47 994 12 707

E-mail: maria.ekornes.myhre@elkem.com

About Elkem

Elkem is one of the world's leading providers of advanced silicon-based

materials shaping a better and more sustainable future. The company develops

silicones, silicon products and carbon solutions by combining natural raw

materials, renewable energy and human ingenuity. Elkem helps its customers

create and improve essential innovations like electric mobility, digital

communications, health and personal care as well as smarter and more sustainable

cities. With a strong track record since 1904, its global team of more than

7,400 people has a joint commitment to stakeholders: Delivering your potential.

In 2023, Elkem achieved an operating income of NOK 35.5 billion and CDP ratings

of A on Forests, and A- on Climate Change and Water Security. Elkem is listed on

the Oslo Stock Exchange (ticker: ELK), where the company is also included in the

ESG Index. www.elkem.com