Elkem Showcases Robust Q3 Performance Amid Market Challenges

Elkem's Third Quarter Performance Highlights

Elkem, a prominent player in the materials sector, has recently unveiled its financial performance for the third quarter of 2025. The company reported an EBITDA of NOK 829 million, a notable decrease from NOK 1,241 million during the same period the previous year. Although sales prices faced downward pressure, Elkem's solid operational performance and cost management strategies played a pivotal role in supporting these results.

Overview of Financial Results

The total operating income for Elkem in this quarter was NOK 7,523 million, reflecting a 7% decrease compared to Q3 of 2024. The earnings before interest, taxes, depreciation, and amortisation (EBITDA) saw a decline of 33% year-on-year. The earnings per share (EPS) was reported at NOK 0.05 for the quarter, with a year-to-date EPS of NOK -0.77, largely affected by the performance of the Silicones division, which is currently under a strategic review and classified as discontinued operations.

Silicon Products and Carbon Solutions Performance

The Silicon Products division was notably impacted by low market prices for silicon and ferrosilicon, which contributed to an operating income of NOK 3,369 million—a reduction of 8% compared to the same quarter last year. Meanwhile, the Carbon Solutions division posted an EBITDA of NOK 231 million, down 14% from a year ago, leading to an EBITDA margin of 28%. This reduction was primarily due to decreasing sales prices and increased raw material costs. In contrast, the Silicones division improved its results, achieving an EBITDA of NOK 248 million, marking a 23% year-on-year increase despite a 6% drop in operating income.

Strategic Outlook and Market Conditions

CEO Helge Aasen expressed confidence in Elkem’s resilience amid ongoing pricing pressures and challenging market conditions. Elkem is undergoing a strategic review aimed at divesting its Silicones division, with the intention of concentrating resources on enhancing growth in both the Silicon Products and Carbon Solutions sectors. This process includes negotiations with a major industrial entity, which could potentially conclude in the first half of 2026.

Influence of EU Safeguard Measures

Looking ahead, the European Union is contemplating the introduction of safeguard measures set to take effect starting November 19, 2025. These regulations are expected to protect internal EU production and may pose implications for Elkem's operations, particularly focusing on ferrosilicon and foundry alloys. Additionally, the United States has implemented countervailing duties on silicon imports from several countries, including Norway, with an initial rate of 16.87% targeted mainly due to CO₂ quota allocation issues.

Equity and Financial Stability Analysis

As of September 30, 2025, Elkem's equity reached NOK 23,968 million, reflecting a robust 50% equity ratio relative to total assets. The net interest-bearing debt stood at NOK 11,666 million, resulting in a debt to EBITDA ratio of 3.1x. The company maintained cash reserves of NOK 3,968 million along with undrawn credit lines approximating NOK 6,000 million, indicating strong financial stability moving forward.

Market Challenges and Future Growth

Despite the ongoing challenges in the silicon and ferrosilicon markets, Elkem's strong cost position and favorable performance in specialty segments are helping to mitigate negative impacts. The Carbon Solutions division is also experiencing pressures due to ongoing weak demand; however, its diverse geographical customer base is a significant asset. Elkem is actively seeking avenues to enhance the market position of its silicones products amidst a backdrop of overcapacity and trade regulations that could shape the industry's landscape going forward.

Company Information

Founded in 1904, Elkem is regarded as a leader in silicon-based materials contributing to a sustainable future. The company specializes in developing silicones, silicon products, and carbon solutions derived from natural resources and renewable energy. Elkem's innovations play a crucial role in various sectors including electric mobility, digital communications, and sustainable urban development. Noteworthy, the company reported an operating income of NOK 33 billion in 2024 and has gained recognition in sustainability indexes like the ESG Index on the Oslo Stock Exchange (ticker: ELK).

Frequently Asked Questions

What financial performance did Elkem report for Q3 2025?

Elkem reported an EBITDA of NOK 829 million and a total operating income of NOK 7,523 million for the third quarter of 2025.

How is Elkem addressing the performance issues in its Silicones division?

Elkem is in the process of strategically reviewing the Silicones division, classified as discontinued operations, and is aiming to sell it to streamline operations.

What impact do EU regulations have on Elkem?

The EU is considering safeguard measures that could affect pricing and internal production, particularly concerning ferrosilicon and foundry alloys.

How does Elkem maintain financial stability?

Elkem holds significant equity and cash reserves, minimizing its financial risk, with NOK 3,968 million in cash and additional undrawn credit lines.

In what industries does Elkem operate?

Elkem operates across various sectors including electric mobility, digital communications, health care, and manufacturing sustainable urban environments.

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