Elkem posts record quarter despite silicones price dip

Oslo - Elkem has reported record quarterly earnings (EBITDA) over the three months to 30 June, despite a decline in silicones prices linked to Covid restrictions in China. 

While posting strong second quarter demand in all major business segments, Elkem noted that its Silicones division had been impacted by Covid restrictions in China.

Reduced demand in China combined with new upstream capacity additions “resulted in increased stock levels and a subsequent price decline,” according to the Norway-based group.

The Silicones division was also hit by a delayed start-up after maintenance work in France, which had an estimated negative EBITDA impact of NOK100 million (€10 million) in the second quarter.

On a more positive note, Elkem said silicones demand in China was “expected to gradually improve as Covid-restrictions are eased. In EMEA and the US, prices and demand for specialties are expected to remain stable.” 

Group-wide Elkem’s total operating income for the second quarter 2022 was NOK12,326 million, up 68% from the same period last year. 

EBITDA totalled NOK3,924 million in the second quarter, compared to NOK1,371 million in the second quarter 2021. 

“Elkem has continued to benefit from strong competitive positions, based on our integrated business model, operational excellence, favourable energy costs and access to critical raw materials,” said CEO Helge Aasen. 

Declaring the outlook as good for the next quarter, Aasen stated: “We continue to develop the company in line with our strategy, with a focus on product specialisation and strong cost positions, and with a strong ESG profile.”