Elkem reports ‘record year’ but silicone market weak

Oslo – Elkem SAS has wrapped up a "record year" in terms of financial results, but  has noted a “weak” performance within its silicones division, particularly in the final quarter of the year.

The Norwegian group saw annual earnings increase 65% year-on-year to NOK12.8 billion (€1.1 billion), particularly buoyed by the performance of its silicon products and carbon solutions divisions.

The group’s silicone’s division, however, reported a “weak” final quarter, severely impacted by the Covid situation in China.

The division’s fourth quarter sales fell 21% to NOK4.1 billion, due mainly to lower sales prices, particularly for commodities in China. For the full year, sales were up 11% at NOK19.2 billion, Elkem reported.

In terms of earnings, the unit went in to red, reporting a loss of NOK52 million, down from NOK1.3 billion posted in the final quarter of 2021. For the full year, earnings were down 45% at NOK2.0 billion.

Elkem linked the fourth quarter earnings loss to “lower sales prices and higher raw material costs.”

In addition, the division’s result was impacted by inventory write downs and extraordinary maintenance costs amounting to NOK175 million, Elkem said.

The ChemChina-owned company noted that market sentiment is currently impacted by "macroeconomic uncertainty and lower growth in key sectors."

“The silicones market in China is weak going into the first quarter but expected to improve after Chinese New Year,” it said.

In addition, Elkem said the division could be negatively impacted by strikes in France.