Elkem reports Q4 recovery in silicones unit

OSLO, Norway—Elkem S.A.'s silicones business saw significant recovery in the fourth quarter with earnings back in black for the final three months of 2023.

Fourth-quarter EBITDA rose to $6.4 million (NOK 68 million), up from a deficit of $5.4 million reported for the same quarter in 2022 (based on average 2022 exchange rates). Sales for the period fell 16 percent year-on-year to $331 million, Elkem reported in a Feb. 8 update.

For the full year, however, the business unit remained in red, with negative earnings development of $57.3 million, down from $208 million reported the year before.

Sales for the full year fell 26 percent to $1.4 billion, the Norwegian materials supplier reported.

Elkem linked the fourth-quarter positive results to "internal improvement programs taking effect," despite challenging markets.

Improved earnings were mainly due to lower raw material costs and improved sales mix. This was partly offset by lower commodity sales prices, Elkem said, noting that sales volume in the quarter was negatively impacted by weak demand and reduced production.

Elkem attributed the weak annual results to lower sales prices and lower sales volume, as well as a maintenance stop in the second quarter of 2023.

Looking ahead, Elkem said markets were "still challenging going into the first quarter 2024."

"Elkem is focusing on extraordinary EBITDA improvements to counter weak demand, especially in silicones," it added.

The silicones demand in China is expected to improve, but "overcapacity will still be an issue, keeping sales prices under pressure," the company concluded.