The Electrometallurgy Division (FerroAtlantica Group) performance has been improving along the 1H 2014, although it remains below expectations:

Total turnover has been EUR 269.1M in 2Q 2014, above the EUR 261.2M of 1Q 2014, but below the EUR 287.0M reached in 2Q 2013.

In 1H 2014 the total figure has been EUR 530.3 a 0.5% above the EUR 527.5M reached in 1H 2013, as the impact of lower prices has been offset by higher sales volumes, 4.3% above previous year (471.8 thousand tons Vs. 452.2 thousand tons), and lower production costs across our factories. 

Current trading is showing a strong performance of silicon metal in the market. According to CRU, Silicon metal prices were in June 2014 around USD 3,000, compared to USD 2,700 per ton in January this year (+11.11%). On the other hand, manganese alloys prices have moved slightly upwards in the last two quarters, although manganese ore prices have come down notably since late March early April 2014.

Consolidated EBITDA in 2Q 2014 has been EUR 39.0M, clearly above the EUR 25.8M of 1Q 2014 and slightly below the EUR 43.4M reached in 2Q 2013. In 1H 2014 consolidated EBITDA has been EUR 64.9M, a figure that has been in line with the EUR 66.9M reached at the end of 1H 2013, although it has to be pointed out that in 2013 the Group had a very important contribution derived from Eskom power buy-back program in South Africa.

In 2014 operating profits both in Spain and France have shown a clear improvement, despite lower sales prices across all our products, while in Venezuela, 1H 2014 figures have begun to show the positive impact of the new exchange rate applied to exporting companies (ca. BLV50 Vs. the USD) since March 24, which is resulting in a significant improvement in the operating costs of Pto. Ordaz factory.

In 1H 2014 GFAT produced 494.6 thousand tons, a 20% more than in 1H 2013, mainly because of the increase of production in South Africa. On the other side, the Spanish factories have been working all the 1H 2014 with very high load factors due to their remarkable operating performance and very competitive production costs, having increased their output by 20% vs. 1H 2013.

1H 2014 CAPEX reached EUR 7.6M, Vs. EUR 9.0M in 1H 2013. This reduction can be explained by the special attention that is being paid this year to net debt reduction and to liquidity profile improvement.

At the end of June, the Net Debt of The Electrometallurgy Division was EUR 211.2M Vs. EUR  281.4M at the end of 2013. This means a reduction of EUR 70.2M that has been driven by (i) EBITDA generation (ii) reduction of CAPEX and maintenance costs and (III) a tight control of working capital evolution. Current Net Debt/EBITDA is x2.1, a figure that it is below our target of x2.5 for 2014.

At the same time, GFAT has improved its liquidity profile and at the end of 1H 2014 it has outstanding liquidity of EUR 216M. Of this amount, EUR 33M correspond to cash and EUR 183M to committed un-drawn financial facilities.

• [Editor:Phillip.Feng]