Elkem's Q2 EBITDA fell to NOK 1.12B as silicones earnings halved. CEO Helge Aasen hands over after 17 years. The incoming chief sees no quick fix from China oversupply.
Alpha Score of 40 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
Elkem posted a second-quarter result that showed the silicones division still weighing on group earnings, even as the outgoing chief executive described the quarter as a period of continued challenging market conditions.
The company reported EBITDA of NOK 1.12 billion for the three months through June, down from NOK 1.38 billion in the same period a year earlier. Revenue fell to NOK 9.8 billion from NOK 10.5 billion.
Silicones, Elkem's largest segment by revenue, posted an EBITDA of NOK 312 million, roughly half the NOK 618 million it generated a year ago. The division has been under pressure from weak demand in construction and consumer goods markets across Europe and China. The silicon products segment fared better, with EBITDA rising to NOK 478 million from NOK 420 million, helped by higher volumes in specialty alloys.
CEO Helge Aasen, who is stepping down after 17 years in the role, said the company is pushing ahead with cost-cutting and operational improvements. "Elkem must continue to deliver on its continuous and various improvement initiatives," he said on the earnings call. Aasen will become chairman of the board. Dag Teigland, the incoming CEO, attended the call and gave a brief introduction but did not take questions.
CFO Morten Viga said the company expects third-quarter silicones volumes to improve seasonally but warned that pricing remains under pressure from oversupply in China. The group's net debt stood at NOK 12.4 billion at the end of June, compared with NOK 11.8 billion at the end of March.
Elkem's board maintained the quarterly dividend at NOK 0.75 per share.
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