Ferroglobe to eliminate ALL discounts on silicon metal; choosing index providers

“Despite the poor results this quarter, primarily as a result of this year’s pricing pressures caused by low priced imports, we are now in the pricing season for 2017 and we are beginning to see some meaningful improvements. The market is adjusting to the realities of production costs, rebalanced inventories and idle capacity, with prices above the reported indexes. Additionally, we are changing our contract structures by removing all discounts to index for silicon metal, and will be utilizing those index providers who modify their reporting criteria to better reflect the overall market,” said CEO Pedro Larrea.

“As part of this, the company is currently pursuing strategic options regarding its hydroelectric assets in Spain and France. These discussions are at a preliminary stage and the company will provide further detail as and when appropriate.”

“In the meantime, we have adapted to circumstances by relentlessly pursuing increased efficiencies, driving higher-than-expected synergies from our merger, and positioning ourselves to benefit from the forthcoming improving pricing environment. To that end, we have taken proactive steps to optimize our asset portfolio and achieved a 13% reduction in our overall cost structure as compared to pro-forma 2015. Combined, these measures have driven positive free cash flow and positive EBITDA on an adjusted basis and our balance sheet remains strong. We are well-positioned to benefit once prices recover,” concluded Larrea.

 

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