Elkem reports fourth quarter recovery in silicones

Oslo – Elkem SA’s silicones business has seen a significant recovery in the fourth quarter of 2023 with earnings returning to black for the final three months of 2023.

Fourth quarter EBITDA (earnings) rose to NOK68 million (€6 million), up from a deficit of NOK52 million reported for the same quarter in 2022.

Sales for the period fell 16% year-on-year to NOK3.5 billion, Elkem reported 8 Feb.

For the full year, however, the business unit remained in red, with negative earnings development of NOK605 million, down from NOK2.0 billion reported the year before.

Sales for the full year fell 26% to NOK14.3 billion, the Norwegian materials supplier reported.

Elkem linked the fourth quarter positive results to “internal improvement programmes taking effect”, despite challenging markets.

Improved earnings were mainly explained by lower raw material costs and improved sales mix.

This was partly offset by lower commodity sales prices, said Elkem, noting that sales volume in the quarter was negatively impacted by weak demand and reduced production.

Elkem attributed the weak annual results to lower sales prices and lower sales volume, as well as maintenance stop in second quarter 2023.

Looking ahead, Elkem said markets were “still challenging going into the first quarter 2024”.

“Elkem is focusing on extraordinary EBITDA improvements to counter weak demand, especially in silicones,” it added.

The silicones demand in China is expected to improve, but “overcapacity will still be an issue, keeping sales prices under pressure,” the company concluded.