OSLO, Norway—Elkem S.A.'s silicones division is set to adjust production and optimize its product mix as the segment continued to underperform in the second quarter.
Over the three months to end of June, the division posted sales of $348 million (NOK 3.5 billion), down 33 percent year-on-year, Elkem reported July 14.
Year-to-date, sales were down by nearly 27 percent at $756 million, according to the ChemChina-owned silicones manufacturer.
Oslo-based Elkem linked the year-on-year decline in revenues to a combination of lower sales prices and lower volumes.
At negative $35 million, segment earnings (EBITDA) came in substantially lower than $74 million reported the year before.
In addition to lower sales, Elkem said, the result was negatively impacted by a $10 million maintenance stop in China and a $7 million inventory write-down.
In response, Elkem is taking measures to counter the business challenges, including by organizing "systematic improvement work along several dimensions."
The focus, said Elkem, will be on fixed-cost reductions, capacity optimization, increased waste recycling, leveraging of by-products and Capex optimization.
As for its full-year outlook, Elkem said that its silicones markets are expected to remain challenging. Therefore, the company said it "plans to run at reduced capacity to optimize product mix."
