Elkem posts record Q2 despite decline in silicone prices

OSLO, Norway—Elkem has reported record quarterly earnings (EBITDA) over the three months to June 30, despite a decline in silicones prices linked to COVID-19 restrictions in China.

While posting strong second-quarter demand in all major business segments, Elkem noted that its silicones division had been impacted by COVID-19 restrictions in China.

Reduced demand in China combined with new upstream capacity additions "resulted in increased stock levels and a subsequent price decline," according to the Norway-based group.

The silicones division was also hit by a delayed start-up after maintenance work in France, which had an estimated negative EBITDA impact of $10.3 million in the second quarter.

On a more positive note, Elkem said silicones demand in China was "expected to gradually improve as COVID-restrictions are eased. In EMEA and the U.S., prices and demand for specialties are expected to remain stable."

Group-wide, Elkem's total operating income for the second quarter 2022 was $1.27 billion, up 68 percent from the same period last year.

EBITDA totaled $403.5 million in the second quarter, compared to $141 million in the second quarter of 2021.

"Elkem has continued to benefit from strong competitive positions, based on our integrated business model, operational excellence, favorable energy costs and access to critical raw materials," said CEO Helge Aasen.

Aasen declared the outlook as good for the next quarter.

"We continue to develop the company in line with our strategy, with a focus on product specialization and strong cost positions, and with a strong ESG profile," he said.