Elkem notes weak silicone performance despite 'record year'

OSLO, Norway—Elkem A.S.A. has wrapped up a "record year" in terms of financial results, but has noted a "weak" performance within its silicones division, particularly in the final quarter of the year.

The Norwegian group saw annual earnings increase 65 percent year-on-year to $1.3 billion, particularly buoyed by the performance of its silicon products and carbon solutions divisions.

The group's silicone's division, however, reported a "weak" final quarter, severely impacted by the COVID-19 situation in China.

The division's fourth quarter sales fell 21 percent to $428 million, due mainly to lower sales prices, particularly for commodities in China. For the full year, sales were up 11 percent at $2 billion, Elkem reported.

In terms of earnings, the unit went in to red, reporting a loss of $5.4 million, down from $151.3 million posted in the final quarter of 2021. For the full year, earnings were down 45 percent at $208.8 million.

Elkem linked the fourth quarter earnings loss to "lower sales prices and higher raw material costs."

In addition, the division's result was impacted by inventory write downs and extraordinary maintenance costs amounting to $18.3 million, Elkem said.

The ChemChina-owned company noted that market sentiment is currently impacted by "macroeconomic uncertainty and lower growth in key sectors.

"The silicones market in China is weak going into the first quarter but expected to improve after Chinese New Year," it said.

In addition, Elkem said the division could be negatively impacted by strikes in France.