Elkem: First quarter 2022: record results

Oslo, Norway, April 27, 2022 /PRNewswire/ — In the first quarter of 2022, Elkem’s results again reached a record level, thanks in particular to the strong performance of the Silicon Products and Carbon Solutions divisions. Elkem benefited from strong prices and good demand in key markets. Wider industry conditions also include challenges from high energy costs, raw material constraints and transportation issues, but Elkem’s strong integrated business model has provided a competitive advantage. Elkem sees good prospects for the second quarter of 2022.

Elkem’s total operating income for the first quarter of 2022 was NOK 11,876 million, which was at its highest level and up 65% compared to the corresponding quarter of last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to NOK 3,875 million during the quarter, compared to NOK 1,231 million in the first quarter of 2021. Earnings per share (EPS) were NOK4.20 in the neighborhood.

“Elkem is starting 2022 at a record high, delivering our third consecutive quarter of record results, following a record year in 2021. Our first quarter earnings more than tripled compared to the same period last year. Elkem sees strong demand entering in the second quarter, driven by strong market positions and robust integrated value chains We also continue to position Elkem for the future in line with our strategy, having achieved a rating among the top 1% of companies in sustainable development, investment in specialization and innovation with a new R&I center in Shanghai and announcing the partnership with Hydro and Altor to accelerate Vianode’s growth as a producer of sustainable battery materials,” said Helge AasenCEO of Elkem.

Elkem benefited from strong prices and good demand in key markets. The energy crisis in Europe led to capacity reductions at silicon and ferrosilicon producers. This resulted in tight market conditions. Additionally, the industry has been impacted by raw material constraints and transportation issues, leading to overall cost pressure and higher selling prices. Elkem’s integrated business model has ensured good access to critical raw materials and relatively stable costs. Consequently, Elkem was able to generate record results.

On April 6, 2022, Elkem announced a partnership with Hydro and Altor to accelerate the growth of Vianode, a producer of sustainable battery materials. Hydro and Altor will each hold 30% of Vianode’s capital, while Elkem will retain 40% of the capital. The transaction is subject to formal and regulatory approvals. Vianode has developed a range of synthetic graphite battery products with unique performance characteristics and produced with a significantly lower CO content2 emissions than today’s standard materials. An investment decision for a potential first phase factory in Herøya, Norwayis planned for the first half of 2022. This investment is estimated at approximately NOK 2 billion and awaits clarification on the framework conditions.

Specialization and innovation are key elements of Elkem’s strategy. In 2021, 26% of Silicones division sales were generated by new products launched in the last five years. The expansion project of Silicones Xinghuo in China should generate more NOK 5 billion sales from downstream specialization by 2030. To achieve this goal, Elkem has decided to invest approximately NOK 150 million in a flagship R&I center of the Asia Pacific region in Shanghai. The new R&I center will house several application centers responding to development trends in key industries such as high performance silicone products for electric vehicles, medical devices, cosmetics, coating materials for textiles, leather and airbags, and products for 3D printing.

In the first quarter, Elkem received a Platinum Sustainability Transparency rating from EcoVadis, one of the largest and most trusted providers of corporate sustainability ratings in the world. This positions Elkem among the top 1% of valued companies globally. Sustainability is an integral part of Elkem’s business strategy.

The group’s equity at March 31, 2022 amounted to NOK 22,853 million, giving an equity/total assets ratio of 51%. Net interest-bearing debt was NOK 3,756 million, resulting in an interest-bearing net debt to EBITDA ratio of 0.4x. Elkem had cash and cash equivalents of NOK 8,127 million like a March 31, 2022 and undrawn credit lines of more than NOK 3,000 million.

Elkem continues to see strong demand at the start of the second quarter, driven by strong market positions and robust, integrated value chains. In silicones, Elkem’s business in EMEA and the US will gradually benefit from somewhat lower silicon prices. In APAC, covid restrictions in China could have an impact on demand. Silicon Products will, however, continue to benefit from strong demand and high prices. Silicon contract prices will be down somewhat from the first quarter of 2022, but will remain at very attractive levels. Carbon Solutions continues to benefit from strong steel and ferroalloy markets outside China but could be exposed to raw material and transport constraints.

For more information, please contact:

Odd-Geir Lyngstad
Vice President Finance and Investor Relations
Tel: +47 976 72 806
E-mail: [email protected]

Fredrick Norman
VP Corporate Communications and Public Affairs
Tel: +47 918 66 567
E-mail: [email protected]

About Elkem

Elkem is a leading global provider of advanced hardware solutions that shape a better, more sustainable future. The company develops silicones, silicone products and carbon solutions by combining natural raw materials, renewable energy and human ingenuity. Elkem helps its customers to create and improve essential innovations such as electric mobility, digital communications, health and personal care as well as smarter and more sustainable cities. With a strong track record dating back to 1904, its global team of over 7,000 people has a shared stakeholder commitment: Unleash your potential. In 2021, Elkem earned a Platinum score from EcoVadis, which ranked the company among the top 1% in the world for sustainability transparency, and the company made an operating profit of NOK 33.7 billion. Elkem is listed on the Oslo Stock Exchange (ticker: ELK). www.elkem.com

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