Half Year 2024 Eramet SA Earnings Call Transcript
Key Points
- Eramet SA (ERMAY) reported a strong operational performance with significant production increases: 33% in manganese ore in Gabon and 40% in nickel ore production in Weda Bay.
- The company has commissioned its first lithium plant in Argentina, with production expected to start in November 2024, positioning it as the first European company to produce battery-grade lithium carbonate at an industrial scale.
- Eramet SA (ERMAY) has maintained a robust balance sheet with a limited increase in net debt despite a challenging pricing environment and significant investments.
- The company has launched a new CSR roadmap, 'Act for Positive Mining,' focusing on safety and employee social protection, achieving a frequency rate of 0.8, which is a 20% improvement over the previous year.
- Eramet SA (ERMAY) has extended its debt maturity by another year, maintaining strong liquidity with a robust balance sheet, enabling confidence in future growth potential.
- The company faced a challenging pricing environment, particularly in nickel, which negatively impacted its financial performance.
- Eramet SA (ERMAY) reported a negative cash flow for the period due to low Weda Bay dividend distribution, sustained CapEx, and higher working capital requirements.
- The SLN operations contributed negatively to the adjusted EBITDA by EUR109 million, significantly impacting the company's financials.
- The company experienced delays in obtaining permits for low-grade saprolite ore sales in Indonesia, affecting external sales.
- The lithium market is currently experiencing low prices, which could impact future profitability despite the company's strong cost position.
Good morning, everyone, and thanks for being with us this morning for our half-year results presentation. I will start with the introduction, and then we will review the financial performance and operational performance. And Nicolas Carre, our CFO, will take care of this presentation, and I'll come back with an update on the strategic roadmap and the conclusion.
So starting with some words of introduction, we delivered a good operational performance in the first half of the year with normal operating conditions in Gabon, strong increase in production in Indonesia, and mining and grade optimization everywhere. In terms of financials, our intrinsic progress, driven by organic growth and productivity, has enabled us to weather a challenging pricing environment and to continue to invest for the group's future growth with a limited impact on net debt.
We have also taken a decisive step in our development in energy transition metal strategy with the commissioning of our first lithium
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