Elkem ASA

Elkem reported operating income of NOK 3.7 billion in the second quarter, down 4% year over year on a comparable basis. EBITDA was NOK 523 million, down 19% year over year, and the EBITDA margin was 14%. EPS was NOK -2.09 per share, while EPS from continued operations was NOK -0.15. Total equity at June 30 was NOK 12.6 billion, equity ratio was 44%, net interest-bearing debt was NOK 6.6 billion, cash was close to NOK 4.9 billion, and leverage was 3.2x versus 5x in Q1. For the divisions, Silicon Products posted operating income of NOK 2.946 billion and EBITDA of NOK 319 million, while Carbon Solutions reported operating income of NOK 741 million and EBITDA of NOK 172 million. Forward-looking guidance: management said the cost reduction program will continue to contribute from Q3 onward, with roughly NOK 150 million per quarter of improvement versus the 2026 budget. Q3 is expected to be affected by seasonally lower activity, especially in Europe, but underlying profitability is improving. The new reporting structure will start from Q3 2026, and management also flagged a Capital Markets Day likely in the second half of October.

Helge Aasen framed the quarter as one of transformation in a difficult market, emphasizing that Elkem is ahead of target on cost actions and has materially strengthened its balance sheet. He highlighted the completion of organizational streamlining after the Silicones sale, the NOK 1.8 billion equity raise, and strategic reviews underway for Iceland and other portfolio opportunities. His tone was constructive but cautious, repeatedly noting weak demand, soft markets, and the need for continued operational discipline.

Morten Viga focused on the reported numbers and the balance sheet. He pointed to EBITDA of NOK 523 million, EPS of NOK -2.09, cash of close to NOK 4.9 billion, net interest-bearing debt of NOK 6.6 billion, and leverage reduced to 3.2x, supported by the NOK 1.8 billion equity injection and full refinancing of main bank facilities. He also said operating cash flow was NOK 733 million, investments were NOK 192 million in the quarter, and the company is keeping investments below NOK 1 billion and working capital down to preserve cash and reduce debt.

Analysts pressed on why “other” EBITDA beat consensus by more than NOK 100 million; management said the outperformance came from FX hedging, better-than-expected cost reductions, stronger results in smaller entities, and Bluestar-related service revenue, and said “no one is wrong.” Questions also focused on the cost program timing, with management saying most of the NOK 600 million annual savings should start showing from Q3, roughly NOK 150 million per quarter versus the 2026 budget. On Iceland, management said the plant is running at reduced capacity pending the strategic review and that no special optimization has been made to inflate or manage the bottom line.