Elkem

Earnings Release • Oct 24, 2018

A strong quarter despite weaker market conditions

A strong quarter despite weaker market conditions

Oslo, October 24, 2018

Elkem's result for the third quarter was strong, despite being affected by

maintenance stops and weaker market prices for its main products. The result was

significantly stronger than the corresponding quarter last year, but weaker than

the second quarter this year. All divisions reported stronger results compared

to third quarter 2017.

The total operating income for the third quarter 2018 was NOK 6,050 million,

which was 14% higher than third quarter 2017. EBITDA for the quarter amounted to

NOK 1,394 million, up from NOK 858 million in the corresponding quarter last

year. Earnings per share (EPS) was NOK 1.57 in third quarter, giving accumulated

EPS of NOK 5.10 year-to-date.

"Despite being impacted by lower sales prices and maintenance stops, we have had

yet another strong quarter. Results are weaker than the previous quarter which

was very strong, but all divisions report stronger results compared to the

corresponding quarter 2017", says Helge Aasen, CEO of Elkem ASA.

Higher operating income and EBITDA compared to the corresponding quarter last

year, were primarily explained by higher sales prices. Elkem's growth in

operating income and EBITDA were mainly driven by Silicones and Foundry

Products.

Despite significant improvements compared to last year, Elkem's result for the

third quarter 2018 has been impacted by maintenance stops at Xinghuo Silicones

and Yongdeng Silicon Materials in China and by lower sales prices.

Xinghuo Silicones stopped production from mid-July to mid-August to undertake

regular maintenance, required for this type of chemical industry facilities. The

maintenance stop reduced the group's production and sales in the quarter. In

addition, Yongdeng Silicon Materials stopped production at two of its furnaces

from end of July for technical upgrades. This project will be finalised early

December 2018.

The silicones market in China has been negatively affected by the new US trade

tariffs. Direct export of intermediary silicone products from China to the US

has been reduced. In addition, the export of other goods containing silicones

has also been reduced. This has resulted in weaker demand in China and

negatively impacted sales prices for intermediary silicone products.

Elkem's financial position is strong. The group's equity as at 30 September 2018

amounted to NOK 12,983 million, giving a ratio of equity to total assets of 48%.

Net interest-bearing debt at quarter-end was NOK 3,788 million, which gave a

ratio of net debt to EBITDA of 0.6 times.

The fundamental market demand is expected to be good in the coming quarters.

However, inventories for silicones in China have increased recently, and prices

for silicones commodities have declined significantly during October. The effect

of US trade tariffs imposed on imports from China has been more significant than

expected and further impact is unclear. Particularly for silicones, prices are

expected to be lower in the fourth quarter. On this basis, the fourth quarter

result is expected to be clearly weaker than the third quarter result.

Elkem ASA will host its Capital Markets Day on November 20 at Felix Conference

centre in Oslo. Registration will be made available closer.

Contact information:

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|Morten Viga |Odd-Geir Lyngstad

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|CFO |VP Finance & Investor Relations Phone: +47 976

72 806|

|Phone: +47 416 09 752 |Email: odd-geir.lyngstad@elkem.no

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|Email: morten.viga@elkem.no|

|

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About Elkem ASA

Founded in 1904, Elkem is one of the world's leading suppliers of silicon-based

advanced materials with operations throughout the value chain from quartz to

specialty silicones, as well as attractive market positions in specialty

ferrosilicon alloys and carbon materials. Elkem is a publicly listed company on

the Oslo Stock Exchange, and is headquartered in Oslo. The company has 6000

employees with 27 production sites and sales offices in a total of 28 countries

worldwide. In 2017 Elkem had revenues of 21.4 billion NOK. To learn more, please

visit www.elkem.com