Ferroglobe Reports Record Financial Performance in Second Quarter 2022

Rhea-AI Summary

Ferroglobe PLC (NASDAQ: GSM) reported a record revenue of $840.8 million for Q2 2022, up 17.6% from the previous quarter, driven by strong demand and higher pricing across product categories. Adjusted EBITDA was $303.2 million, marking a 25.7% increase, with a margin improvement to 36.1%. Net profit climbed to $185.1 million, or $0.98 per share. Notably, net debt decreased significantly to $194 million from $342 million, bolstering liquidity to $306.5 million. The company also launched an inaugural ESG report and announced a revised cost-saving target of $225 million.

Positive

• Record Q2 2022 revenue of $840.8 million, up 17.6% quarter-over-quarter.
• Adjusted EBITDA increased to $303.2 million, up 25.7% from the prior quarter.
• Net profit reached $185.1 million, or $0.98 per diluted share, compared to $150.8 million in Q1 2022.
• Net debt significantly reduced to $194 million, down from $342 million.
• Total cash balance improved to $306.5 million, an increase of $130.5 million from the previous quarter.
• Increased run-rate cost savings target raised to $225 million from an initial $180 million.

Negative

• Raw materials and energy costs rose to $369.8 million, up 9% from the previous quarter, impacting margins.
• Inflationary pressures continued to affect input costs, despite energy cost benefits in France.

LONDON, Aug. 15, 2022 (GLOBE NEWSWIRE) -- 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 2022.

FINANCIAL HIGHLIGHTS

• Record Q2 2022 revenue of $840.8 million, up 17.6% over the prior quarter
• Record Q2 2022 Adjusted EBITDA of $303.2 million, up 25.7% over the prior quarter
• Adjusted EBITDA margin improvement of 234 basis points to 36.1% in Q2 2022, up from 33.7% the prior quarter
• Record net profit of $185.1 million (diluted earnings per share of $0.98), compared to net profit of $150.8 million (diluted earnings per share of $0.80) in Q1 2022
• Net debt of $194 million at quarter end, significant decrease from $342 million at the end of Q1
• Bolstered liquidity: total cash of $306.5 million at quarter-end, up $130.5 million from the prior quarter, and new $100 million asset based loan (undrawn)

BUSINESS HIGHLIGHTS

• Stellar performance across the platform; strong pricing across all product categories
• Robust volume demand in manganese alloys
• Successful execution of corporate priorities: significant reduction in net debt and bolstering of liquidity
• Increased run-rate cost savings targets relating to the strategic turnaround plan:
  • from the initial run-rate target of $180 million to the revised target of $225 million
• Restart of the second furnace at the Selma, Alabama facility during the quarter; current run-rate annual silicon metal production of 22,000 tons
• Achieved new industry milestones in our silicon metal powders for batteries
• Signing of MOU in the United States to establish low-carbon and fully traceable solar supply chain
• Published inaugural ESG report
  

Dr. Marco Levi, Ferroglobe’s Chief Executive Officer, commented, “Since designing our transformation plan in 2020, our team has been resilient in pushing forward to bolster our overall competitiveness by refocusing the product portfolio towards higher value added products and continuously improving our cost position. I am proud that for six consecutive quarters now, we have steadily improved our financial results on the back of these various initiatives, and are currently reporting a record-setting second quarter. Our profitablity is the highest in company history, our net debt is the lowest since the formation of Ferroglobe, and our daily operations are running seamlessly. This drastic improvement in our operational and financial results reinforce our current strategy and approach to driving change so that we can ensure that our company remains competitive for the long-term.”

“As the operating environment evolves, our business continues to evolve. We recently published our inaugural ESG report as an initial step towards increased transparency through reporting of key performance metrics. We continue to feel good about the near-term fundamentals in terms of overall demand and pricing, relative to historical pricing levels. However, in the face of macro uncertainty, inflation, and the global energy crisis, we are entering the second half of the year with a degree of caution. Our primary focus remains on driving profitability and cash generation so that we can deliver on our goals,” concluded Dr. Levi.

Second Quarter 2022 Financial Highlights

		Quarter Ended				Quarter Ended				Quarter Ended								Six Months Ended				Six Months Ended
$,000 (unaudited)		June 30, 2022				March 31, 2022				June 30, 2021				% CQ/PQ		% CYQ/PYQ		June 30, 2022				June 30, 2021				% CY/PY
Sales		$	840,808			$	715,265			$	418,538			18%		101%		$	1,556,073			$	779,928			100%
Raw materials and energy consumption for production		$	(369,749	)		$	(340,555	)		$	(267,939	)		9%		38%		$	(710,304	)		$	(518,104)			37%
Operating profit (loss)		$	265,298			$	211,130			$	8,421			26%		3,050%		$	476,428			$	(35,762)			1,432%
Operating margin			31.6%				29.5%				2%								30.6%				(5%	)
Adjusted net income (loss) attributable to the parent		$	213,170			$	165,303			$	2,964			29%		7,092%		$	378,472			$	(15,208)			2,589%
Adjusted diluted EPS		$	1.14			$	0.88			$	0.02							$	2.02			$	(0.10)
Adjusted EBITDA		$	303,159			$	241,119			$	34,088			26%		789%		$	544,277			$	56,157			869%
Adjusted EBITDA margin			36.1%				33.7%				8.1%								35.0%				7.2%
Operating cash flow		$	164,818			$	65,908			$	(3,164	)		150%		5,309%		$	230,726			$	11,627			1,884%
Free cash flow1		$	151,109			$	56,783			$	(5,738	)		166%		2,733%		$	207,892			$	3,405			6,005%
Working Capital		$	687,345			$	613,187			$	334,291			12%		106%		$	687,345			$	334,291			106%
Working Capital as % of Sales2			20.4%				21.4%				20.0%								22.1%				21.4%
Cash and Restricted Cash		$	306,511			$	176,022			$	106,089			74%		189%		$	306,511			$	106,089			189%
Adjusted Gross Debt3		$	500,472			$	518,093			$	464,078			(3%)		8%		$	500,472			$	464,078			8%
Equity		$	637,710			$	475,477			$	299,469			34%		113%		$	637,710			$	299,469			113%

^{(1)  Free cash flow is calculated as operating cash flow plus investing cash flow
(2)  Working capital based on annualized quarterly sales respectively
(3)  Adjusted gross debt excludes bank borrowings on factoring program and impact of leasing standard IFRS16 at June 30, 2022 Mar 31, 2022 & June 30, 2021}

Sales

In the second quarter of 2022, Ferroglobe reported net sales of $840.8 million, up 18% over the prior quarter and up 101% over Q2 2021.   The improvement in our second quarter results is primarily attributable to higher volumes across our product portfolio, and higher pricing primarily in silicon based alloys and manganese based alloys. The $126 million increase in sales over the prior quarter was primarily driven by silicon metal, which accounted for $43 million, and manganese-based alloys, which accounted for $48 million.

Raw materials and energy consumption for production

Raw materials and energy consumption for production was $369.8 million in Q2 2022 versus $340.6 million in the prior quarter, an increase of 9%. As a percentage of sales, raw materials and energy consumption for production was 44% in the second quarter of 2022 versus 47.6% in the prior quarter. Costs of several key inputs such as electrodes, paste and coal were adversely impacted by inflationary pressures. Partially offsetting this was a $31.2 milion energy cost benefit in France, which will continue to benefit our costs for the remainder of 2022.

Net Income (Loss) Attributable to the Parent

In Q2 2022, net profit attributable to the Parent was $185.3 million, or $0.98 per diluted share, compared to a net profit attributable to the Parent of $151.2 million, or $0.80 per diluted share in Q1 2022.

Adjusted EBITDA

In Q2 2022, Adjusted EBITDA was $303.2 million, or 36.1% of sales, an increase of 25.7% compared to adjusted EBITDA of $241.1 million, or 33.7% of sales in Q1 2022. The increase in the Q2 2022 Adjusted EBITDA is primarily attributable to volume products increase across all the products. Overall, the positive impact from pricing was $13.4 million and the impact from higher volumes was $49.6 million. During the quarter, the impact of higher costs was $3.9 million, primarily due to the raw material price inflation, partially offset by improved energy costs in Spain and France.

Total Cash

The total cash balance was $306.5 million as of June 30, 2022, up $130.5 million from $176.0 million as of March 31, 2022.

During Q2 2022, we generated positive operating cash flow of $164.8 million, had negative cash flow from investing activities of $13.7 million, and $14.8 million in cash flow from financing activities.  

Total Working Capital  

Total working capital was $687.3 million in the second quarter of 2022, increasing from $613.2 million at March 31, 2022. The $74.1 million increase in working capital was due primarily to a $40.7 million increase in inventories as a result of higher sales, and a $34.8 million decrease in accounts payables. On a relative basis, we successfully kept working capital as a percentage of sales flat during the second quarter at 20.4%, compared to 21.4% during the prior quarter. This is largely attributable to the financial discipline introduced to our operations over the past year.

Closing of Asset-Based Revolving Credit Facility

The Company closed a new, five-year $100 million North American asset-based revolving credit facility (the “ABL Revolver”), involving Ferroglobe’s subsidiary, Globe Specialty Metals, Inc. (“Globe”), and its wholly owned North American subsidiaries, as borrowers, and Bank of Montreal (“BMO”), as lender and agent, on June 30, 2022.

At closing, there was no drawing under the ABL Revolver. Going forward, potential drawings under the ABL Revolver will be used for general corporate purposes.
The ABL Revolver is subject to a borrowing base comprising North American inventory and accounts receivable of Globe (and certain of its subsidiaries) and bears interest of SOFR plus a spread of 150-175 basis points depending on the level of utilization.

Beatriz García-Cos, Ferroglobe’s Chief Financial Officer, commented, “During the second quarter we successfully executed a number of initiatives, in addition to delivering record setting results. We strengthened our balance sheet by increasing liquidity with a new $100 million asset based loan which offers significantly lower cost of capital relative to our existing debt instruments. Furthermore, we are delivering on our key priority which is significant deleveraging of the balance sheet, with a gross debt target of $200 million. We opportunistically repurchased senior notes in the open market and we successfully redeemed the full $60 million of 9% senior notes in July. The recent upgrades to our credit rating is a further testament to the strengthening of our credit profile.”

“While we have been performing well in a market with strong prices and healthy demand, a significant part of our outperformance has been the result of our transformation initiatives, which should enable us to ensure positive cash generation through the cycle. Since initiating this plan, we have increased our target cost savings from $180 million to $225 million as we identify new areas for further cost reduction, improve efficiencies within our organization, and optimize our working capital in a collective effort to drive cash generation,” added Mrs. García-Cos.

Product Category Highlights

Silicon Metal

		Quarter Ended				Quarter Ended							Quarter Ended							Six Months Ended				Six Months Ended
		June 30, 2022				March 31, 2022				Change			June 30, 2021				Change			June 30, 2022				June 30, 2021				Change
Shipments in metric tons:			62,988				56,349			11.8	%			67,322			(6.4	)%			119,337				128,597			(7.2	)%
Average selling price ($/MT):			5,649				5,552			1.7	%			2,347			140.7	%			5,603				2,317			141.8	%
Silicon Metal Revenue ($,000)			355,819				312,850			13.7	%			158,005			125.2	%			668,669				297,959			124.4	%
Silicon Metal Adj.EBITDA ($,000)			175,108				151,661			15.5	%			13,655			1182.4	%			326,769				28,417			1049.9	%
Silicon Metal Adj.EBITDA Mgns			49.2	%			48.5	%						8.6	%						48.9	%			9.5	%

Silicon metal revenue in the second quarter was $355.8 million, an increase of 13.7% over the prior quarter. Total shipments of silicon metal increased 11.8% due to continued demand strength in the chemical and aluminum end markets, the restart of our Selma, Alabama facility, some carry over from Q1´22 due to logistical challenges. Costs were adversely impacted by inflationary pressure on raw materials and general operating costs ($10.4 million), increases across several other areas ($2.2 million), and positively offset by the current quarter’s net impact on the energy price adjustment in France ($12.2 million). Adjusted EBITDA for silicon metal increased to $175.1 million during the second quarter, up 15.5% from $151.7 million the prior quarter.

Silicon-Based Alloys

		Quarter Ended				Quarter Ended							Quarter Ended							Six Months Ended				Six Months Ended
		June 30, 2022				March 31, 2022				Change			June 30, 2021				Change			June 30, 2022				June 30, 2021				Change
Shipments in metric tons:			57,658				57,594			0.1	%			65,222			(11.6	)%			115,252				126,826			(9.1	)%
Average selling price ($/MT):			4,097				3,680			11.3	%			1,830			123.9	%			3,889				1,750			122.2	%
Silicon-based Alloys Revenue ($,000)			236,225				211,946			11.5	%			119,356			97.9	%			448,171				221,946			101.9	%
Silicon-based Alloys Adj.EBITDA ($,000)			97,141				78,411			23.9	%			11,380			753.6	%			175,552				21,474			717.5	%
Silicon-based Alloys Adj.EBITDA Mgns			41.1	%			37.0	%						9.5	%						39.2	%			9.7	%

Silicon-based alloy revenue in the second quarter was $236.2 million, an increase of 11.5% over the prior quarter. The average realized selling price improve by 11.3%, due to product mix, with a greater weighting towards specialty grades and higher priced foundry products. Total shipments were in-line over the prior quarter. Costs were adversely impacted by inflationary pressures across raw materials and general operating costs ($6.6 million), and expenses related to the Chateau Feulliet facility in France ($4.1 million). This part of our business benefited from the positive energy price adjustment in Frnace ($2.9 million). Adjusted EBITDA for the silicon- based alloys portfolio increased to $97.1 million, up 23.9% from $78.4 million the prior quarter.

Manganese-Based Alloys

		Quarter Ended				Quarter Ended							Quarter Ended							Six Months Ended				Six Months Ended
		June 30, 2022				March 31, 2022				Change			June 30, 2021				Change			June 30, 2022				June 30, 2021				Change
Shipments in metric tons:			97,007				75,082			29.2	%			68,323			42.0	%			172,089				140,932			22.1	%
Average selling price ($/MT):			1,986				1,925			3.2	%			1,414			40.5	%			1,959				1,290			51.9	%
Manganese-based Alloys Revenue ($,000)			192,656				144,533			33.3	%			96,609			99.4	%			337,189				181,802			85.5	%
Manganese-based Alloys Adj.EBITDA ($,000)			32,871				20,371			61.4	%			15,662			109.9	%			53,242				25,836			106.1	%
Manganese-based Alloys Adj.EBITDA Mgns			17.1	%			14.1	%						16.2	%						15.8	%			14.2	%

Manganese-based alloy revenue in the second quarter was $192.7 million, an increase of 33.3% over the prior quarter. Total shipments of manganese-based alloys increased 29.2%. Averaged realized selling prices were positively impacted by the increase in index pricing which continued in Q2 2022. During the quarter, Adjusted EBITDA from our manganese-based alloys portfolio was $32.9 million, up 61.4% over the prior quarter as a result of higher volumes. Costs were adversely impacted by the mark-to-market accounting treatment relating to the earn-out provision ($6.7 million), an increase in raw material costs ($0.5 million), and positively offset by improved energy costs in Spain and France ($6.1 million).

Russia – Ukraine War

The recent outbreak of war between Russia and Ukraine has disrupted supply chains and caused instability in the global economy, while the United States and the European Union, among other countries, announced sanctions against Russia. The ongoing conflict could result in the imposition of further economic sanctions against Russia. Sanctions imposed on coal & assimilated products such as anthracite and metallurgical coke have obliged Ferroglobe to redirect its sourcing of such products to other origins at a moment of strong market demand. The uncertain supply and logistical conditions in Russia have also led Ferroglobe to diversify its sourcing of carbon electrodes. New sourcing were put in place during the course of Q2 2022 allowing Ferroglobe to ensure supply continuity to its operations worldwide. Although Ferroglobe managed successfully to ensure supply continuity at its operations, it was impacted by the short-term increase of raw materials prices linked to the conflict.

Subsequent events

Redemption of 9.0% Senior Secured Notes due 2025  

On July 11, the Company announce the giving of a notice of redemption of all of the 9.0% Senior Secured Notes due 2025 issued by the Issuer (the “Notes”) at 100% of the principal amount thereof plus accrued interest. On the date hereof, $60 million in aggregate principal amount was outstanding. The redemption has been carried out on July 21, 2022.        

Conference Call

Ferroglobe invites all interested persons to participate on its conference call at 8:30 AM, U.S. Eastern Daylight Time on August 16, 2022. Please dial-in at least five minutes prior to the call to register. The call may also be accessed via an audio webcast.

To join via phone:  
Conference call participants should pre-register using this link:
https://register.vevent.com/register/BIff8f07e860f54efe8cf0e341348f49d0 
Once registered, you will receive the dial-in numbers and a personal PIN, which are required to access the conference call.

To join via webcast: 
A simultaneous audio webcast, and replay will be accessible here:
https://edge.media-server.com/mmc/p/rvdq3dxw  

About Ferroglobe

Ferroglobe is one of the world’s leading suppliers of silicon metal, silicon- 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

This document may contain summarized, non-audited or non-GAAP financial information. The information contained herein should therefore be considered as a whole and in conjunction with all the public information regarding the Company available, including any other documents released by the Company that may contain more detailed information. Adjusted EBITDA, adjusted EBITDA margin, adjusted net profit, adjusted profit per share, working capital and net debt, are non-IFRS financial metrics that management uses in its decision making. Ferroglobe has included these financial metrics to provide supplemental measures of its performance. The Company believes these metrics are important and useful to investors 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
Executive Vice President – Investor Relations 
Email:   investor.relations@ferroglobe.com

MEDIA CONTACT:

Cristina Feliu Roig
Executive Director – Communications & Public Affairs
Email:   corporate.comms@ferroglobe.com

Ferroglobe PLC and Subsidiaries
Unaudited 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, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Sales		$	840,808			$	715,265			$	418,538			$	1,556,073			$	779,928
Raw materials and energy consumption for production			(369,749	)			(340,555	)			(267,939	)			(710,304	)			(518,104	)
Other operating income			26,223				23,008				37,105				49,231				39,018
Staff costs			(80,704	)			(81,986	)			(63,197	)			(162,690	)			(158,464	)
Other operating expense			(130,992	)			(83,176	)			(93,171	)			(214,168	)			(130,006	)
Depreciation and amortization charges, operating allowances and write-downs			(20,185	)			(21,109	)			(23,523	)			(41,294	)			(48,808	)
Other gain (loss)			(103	)			(317	)			608				(420	)			674
Operating profit (loss)			265,298				211,130				8,421				476,428				(35,762	)
Net finance expense			(12,829	)			(12,455	)			(11,178	)			(25,284	)			(27,042	)
Exchange differences			(7,882	)			(4,393	)			3,237				(12,275	)			(6,077	)
Profit (loss) before tax			244,587				194,282				480				438,869				(68,881	)
Income tax benefit (loss)			(59,529	)			(43,495	)			250				(103,024	)			1,094
Profit (loss) for the period			185,058				150,787				730				335,845				(67,787	)
Loss attributable to non-controlling interest			265				376				1,180				641				2,315
Profit (loss) attributable to the parent		$	185,323			$	151,163			$	1,910			$	336,486			$	(65,472	)
EBITDA		$	285,483			$	232,239			$	31,944			$	517,722			$	13,046
Adjusted EBITDA		$	303,159			$	241,119			$	34,088			$	544,277			$	56,157
Weighted average shares outstanding
Basic			187,441				187,408				169,298				187,424				169,295
Diluted			188,538				188,583				169,298				188,567				169,295
Profit (loss) per ordinary share
Basic		$	0.99			$	0.81			$	0.01			$	1.80			$	(0.39	)
Diluted		$	0.98			$	0.80			$	0.01			$	1.78			$	(0.39	)

Ferroglobe PLC and Subsidiaries
Unaudited Condensed Consolidated Statement of Financial Position
(in thousands of U.S. dollars)

		June 30,				March 31,				December 31,
		2022				2022				2021
ASSETS
Non-current assets
Goodwill		$	29,702			$	29,702			$	29,702
Other intangible assets			94,866				188,407				100,642
Property, plant and equipment			528,198				548,862				554,914
Other non-current financial assets			3,920				3,977				4,091
Deferred tax assets			124				246				7,010
Non-current receivables from related parties			1,558				1,665				1,699
Other non-current assets			17,818				18,819				18,734
Non-current restricted cash and cash equivalents			2,077				2,220				2,272
Total non-current assets			678,263				793,898				719,064
Current assets
Inventories			403,004				362,298				289,797
Trade and other receivables			498,619				499,953				381,073
Current receivables from related parties			2,605				2,784				2,841
Current income tax assets			2,314				408				7,660
Other current financial assets			203				203				104
Other current assets			15,518				11,838				8,408
Current restricted cash and cash equivalents			—				—				—
Cash and cash equivalents			304,434				173,802				114,391
Total current assets			1,226,697				1,051,286				804,274
Total assets		$	1,904,960			$	1,845,184			$	1,523,338
EQUITY AND LIABILITIES
Equity		$	637,710			$	475,477			$	320,031
Non-current liabilities
Deferred income			48,961				70,699				895
Provisions			55,771				57,858				60,958
Bank borrowings			2,922				3,360				3,670
Lease liabilities			9,514				10,636				9,968
Debt instruments			385,911				404,954				404,938
Other financial liabilities (1)			37,020				38,674				4,549
Other Obligations (2)			43,232				37,241				38,082
Other non-current liabilities (2)			—				—				1,476
Deferred tax liabilities			41,228				35,423				25,145
Total non-current liabilities			624,559				658,845				549,681
Current liabilities
Provisions			95,300				159,386				137,625
Bank borrowings			96,412				95,359				95,297
Lease liabilities			7,342				7,869				8,390
Debt instruments			15,075				6,382				35,359
Other financial liabilities (1)			57,653				62,141				62,464
Payables to related parties			9,605				8,685				9,545
Trade and other payables			214,278				249,064				206,000
Current income tax liabilities			43,193				21,208				1,775
Other Obligations (2)			16,469				18,369				22,843
Other current liabilities (2)			87,364				82,399				74,328
Total current liabilities			642,691				710,862				653,626
Total equity and liabilities		$	1,904,960			$	1,845,184			$	1,523,338

^{(1)  On January 25, 2022, the Ministry opened a hearing to decide on reimbursement of the loan. The company presented its allegations on February 15, 2022. Based on those allegations, the reimbursement procedure has been suspended and a new final report is expected to be made by the Ministry by the end of 2022 ending the administrative procedure and establishing the definitive amount of the partial reimbursement to be made. However, for accounting purposes the entire loan was considered short-term
(2)  In 2021 we disaggregated “Other liabilities” into an additional line to the balance sheet “Other obligations“ to separately present certain contractual obligations whose nature and function differs from other items presented in the “Other liabilities line”, so as to allow a better understanding of the Company´s financial position.}

Ferroglobe PLC and Subsidiaries
Unaudited Condensed Consolidated Statement of Cash Flows

		Quarter Ended				Quarter Ended				Quarter Ended				Six Months Ended				Six Months Ended
		June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Cash flows from operating activities:
Profit (loss) for the period		$	185,058			$	150,787			$	730			$	335,845			$	(67,787	)
Adjustments to reconcile net (loss) profit to net cash used by operating activities:
Income tax (benefit) expense			59,529				43,495				(250	)			103,024				(1,094	)
Depreciation and amortization charges, operating allowances and write-downs			20,185				21,109				23,523				41,294				48,808
Net finance expense			12,829				12,455				11,178				25,284				27,042
Exchange differences			7,882				4,393				(3,237	)			12,275				6,077
Net loss (gain) due to changes in the value of asset			(10	)			(6	)			(243	)			(16	)			(264	)
Gain on disposal of non-current assets			—				302				—				302				(43	)
Share-based compensation			970				1,807				673				2,777				886
Other adjustments (1)			112				21				(366	)			133				(368	)
Changes in operating assets and liabilities																			—
(Increase) decrease in inventories			(59,568	)			(73,611	)			(8,770	)			(133,179	)			2,676
(Increase) decrease in trade receivables			(25,963	)			(121,767	)			(8,625	)			(147,730	)			(50,317	)
Increase (decrease) in trade payables			(10,959	)			40,073				16,184				29,114				42,336
Other			5,654				(12,463	)			(32,783	)			(6,809	)			4,910
Income taxes paid			(30,901	)			(687	)			(1,178	)			(31,588	)			(1,235	)
Net cash provided (used) by operating activities			164,818				65,908				(3,164	)			230,726				11,627
Cash flows from investing activities:
Interest and finance income received			140				68				128				208				163
Payments due to investments:
Other intangible assets (1)			—				—				—				—				—
Property, plant and equipment			(13,855	)			(9,193	)			(3,245	)			(23,048	)			(8,928	)
Other			6				—				—				6				—
Disposals:																			—
Other non-current assets			—				—				543				—				543
Net cash (used) provided by investing activities			(13,709	)			(9,125	)			(2,574	)			(22,834	)			(8,222	)
Cash flows from financing activities:
Payment for debt and equity issuance costs			(100	)			—				(11,093	)			(100	)			(17,691	)
Proceeds from debt issuance			—				(4,943	)			40,000				(4,943	)			40,000
Increase/(decrease) in bank borrowings:																			—
Borrowings			301,360				244,164				149,945				545,524				277,635
Payments			(292,253	)			(237,627	)			(144,983	)			(529,880	)			(302,447	)
Amounts paid due to leases			(2,277	)			(2,518	)			(3,157	)			(4,795	)			(6,013	)
Other amounts received/(paid) due to financing activities			(19,119	)			38,298				—				19,179				—
Interest paid			(2,376	)			(34,799	)			(3,333	)			(37,175	)			(20,348	)
Net cash (used) provided by financing activities			(14,765	)			2,575				27,379				(12,190	)			(28,864	)
Total net cash flows for the period			136,344				59,358				21,641				195,702				(25,459	)
Beginning balance of cash and cash equivalents			176,022				116,663				84,367				116,663				131,557
Exchange differences on cash and cash equivalents in foreign currencies			(5,855	)			1				81				(5,854	)			(9	)
Ending balance of cash and cash equivalents		$	306,511			$	176,022			$	106,089			$	306,511			$	106,089
Cash from continuing operations			304,434				173,802				99,940				304,434				99,940
Current/Non-current restricted cash and cash equivalents			2,077				2,220				6,149				2,077				6,149
Cash and restricted cash in the statement of financial position		$	306,511			$	176,022			$	106,089			$	306,511			$	106,089

Adjusted EBITDA ($,000):

		Quarter Ended				Quarter Ended				Quarter Ended				Six Months Ended				Six Months Ended
		June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Profit (loss) attributable to the parent		$	185,323			$	151,163			$	1,910			$	336,486			$	(65,472	)
Profit (loss) attributable to non-controlling interest			(265	)			(376	)			(1,180	)			(641	)			(2,315	)
Income tax (benefit) expense			59,529				43,495				(250	)			103,024				(1,094	)
Net finance expense			12,829				12,455				11,178				25,284				27,042
Exchange differences			7,882				4,393				(3,237	)			12,275				6,077
Depreciation and amortization charges, operating allowances and write-downs			20,185				21,109				23,523				41,294				48,808
EBITDA			285,483				232,239				31,944				517,722				13,046
Restructuring and termination costs			3,406				5,909				2,144				9,315				43,111
New strategy implementation			14,270				2,971				—				17,240				—
Adjusted EBITDA		$	303,159			$	241,119			$	34,088			$	544,277			$	56,157

Adjusted profit attributable to Ferroglobe ($,000):

		Quarter Ended				Quarter Ended				Quarter Ended				Six Months Ended				Six Months Ended
		June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Profit (loss) attributable to the parent		$	185,323			$	151,163			$	1,910			$	336,486			$	(65,472	)
Tax rate adjustment			13,498				6,931				(404	)			20,429				20,948
Restructuring and termination costs			2,765				4,797				1,458				7,562				29,315
New strategy implementation			11,584				2,412				—				13,995				—
Adjusted profit (loss) attributable to the parent		$	213,170			$	165,303			$	2,964			$	378,472			$	(15,208	)

Adjusted diluted profit per share:

		Quarter Ended				Quarter Ended				Quarter Ended				Six Months Ended				Six Months Ended
		June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Diluted profit (loss) per ordinary share		$	0.98			$	0.80			$	0.01			$	1.78			$	(0.39	)
Tax rate adjustment			0.08				0.04				(0.00	)			0.12				0.12
Restructuring and termination costs			0.02				0.03				0.01				0.04				0.17
New strategy implementation			0.06				0.01				—				0.08				—
Adjusted diluted profit (loss) per ordinary share		$	1.14			$	0.88			$	0.02			$	2.02			$	(0.10	)

FAQ

What were Ferroglobe's Q2 2022 financial results?

Ferroglobe reported Q2 2022 revenue of $840.8 million, adjusted EBITDA of $303.2 million, and net profit of $185.1 million.

How much did Ferroglobe reduce its net debt in Q2 2022?

Ferroglobe reduced its net debt to $194 million in Q2 2022, down from $342 million in Q1 2022.

What is Ferroglobe's new cost-saving target?

Ferroglobe raised its cost-saving target from $180 million to $225 million.

Did Ferroglobe face any challenges in Q2 2022?

Ferroglobe faced inflationary pressures on raw materials and energy costs, which increased to $369.8 million.

What is Ferroglobe's stock symbol?

Ferroglobe is traded on NASDAQ under the stock symbol GSM.