[Ferro-Alloys.com] OM Holdings Delivers Solid Fy2024 Performance With Revenue Growth and Strategic Advancements in Operations

OM Holdings Limited (“OMH” or the “Company”, together with its subsidiaries (the “Group”), an international manganese and silicon smelting group, today announced its financial results for the full year ended 31 December 2024 (“FY2024”). Despite ongoing pressures from declining ferroalloy prices, the Company has continued to deliver solid financial performance, maintaining a strong focus on operational excellence.

The Group reported higher revenue of US$654.3 million, an 11% increase from the previous financial year (“FY2023”), driven by higher volumes of alloys traded in FY2024. With an average 15 out of 16 furnaces in operation last year, the Company achieved record production levels, surpassing 500,000 tonnes of alloys (ferrosilicon and silicomanganese combined) in both output and sales.

Given the cost efficiencies achieved, gross profit for the year amounted to US$113.2 million, representing

a gross profit margin of 17%, slightly higher than the US$94.8 million gross profit and 16% margin reported for FY2023. Net profit after tax stood at US$9.7 million, with higher distribution costs and foreign exchange loss recorded, while basic and diluted profit per share was 1.22 US cents. Earnings before interest, tax, depreciation, and amortisation amounted to US$76.0 million, with the smelting business segment contributing US$27.7 million and the marketing and trading segment contributing US$22.6 million.

In recognizing the trust and support of our valued shareholders, OMH is pleased to declare a final dividend of A$0.004 per share for FY2024. This represents 20% of the Group’s net profit after tax of US$9.7 million. This decision aligns with the Group’s Dividend Policy and underscores the deep commitment to delivering sustainable value to shareholders.

Commenting on the results, Executive Chairman and Chief Executive Officer of OMH, Mr Low Ngee Tong stated “We are pleased with our achievements in FY2024. We sincerely appreciate shareholders’ continued confidence in our vision, and we remain dedicated to driving long-term value and stability for all stakeholders. Despite a sharp increase in ore costs last year and ferroalloys market performing below expectations, we stayed focused on what we could control – driving efficiency, optimizing operations, and making strategic market decisions.”

Mr Low added “Our record production in FY2024 was a significant achievement, helping to cushion the impact of declining alloy prices, which squeezed margins, particularly in the second half of the year. Amid the volatility in the manganese ore and silicomanganese markets, our proactive approach to raw material procurement was crucial. By securing supplies at the right price levels, we maintained cost competitiveness and ensured uninterrupted production.”

“Our strategic pivot with the silicon metal furnaces - temporarily switching to ferrosilicon production – allowed us to maximize returns during a period of global silicon metal oversupply and subdued demand. In challenging times like this, agility and adaptability have been key, enabling us to navigate market uncertainties while maintaining strong operational performance.”

OMH’s financial position at the end of FY2024 remained healthy, with a consolidated cash position of US$67.9 million (including cash collateral), while net cash flows generated from operating activities were US$83.3 million. Total borrowings to equity ratio as at 31 December 2024 were reduced from 0.64 times as at 31 December 2023 to 0.52 times, which signified the Company’s commitment for continuous debt repayments while balancing growth.

The Record Date for the dividend will be 2 May 2025 and a Payment Date on 23 May 2025. For shareholders whose shares are held on Bursa Malaysia Securities Berhad, the final dividend of A$0.004 per share (approximately MYR0.011 per share) will be paid on the same Payment Date, with the exchange rate fixed at the Record Date of 2 May 2025. All other shareholders will be paid in AUD.

FINANCIAL ANALYSIS

The Group recorded revenue of US$654.3 million for FY2024, which was a 11% increase from US$589.2 million recorded for FY2023. The increase in revenue was mainly attributed to higher volumes of alloys traded.

Average selling prices for Manganese (“Mn”) alloys in FY2024 were higher as compared to FY2023 mainly due to a sharp spike in Mn alloy prices in mid-2024. In contrast, average selling prices for FeSi in FY2024 were lower as compared to FY2023, mainly due to the suppressed demand from steel mills amid higher energy costs and a weakening global steel market since mid-2022 to FY2024.

Platts reported that prices of FeSi stabilised in the first half of 2024, with prices decreasing slightly from US$1,285 per tonne CIF Japan at the end of December 2023, to US$1,210 per tonne CIF Japan at the end of March 2024, before rebounding to US$1,290 per tonne CIF Japan at the end of June 2024. However, FeSi prices gradually declined in the second half of 2024 and closed at US$1,185 per tonne CIF Japan at the end of December 2024.

The prices of SiMn rebounded sharply in mid-2024 on the back of stronger manganese ore prices. SiMn prices increased from US$900 per tonne CIF Japan at the end of December 2023, to US$1,165 per tonne CIF Japan at the end of June 2024, before declining to closed at US$885 per tonne CIF Japan at the end of December 2024.

As an indication, the index manganese ore prices published by Fastmarkets MB increased from US$4.17/dmtu CIF China at the end of December 2023, to US$4.32/dmtu CIF China at the end of March 2024. Prices then surged by 92%, reaching US$8.30/dmtu CIF China at the end of June 2024, before declining and closed at US$4.08/dmtu CIF China at the end of December 2024. The mid-2024 price spike was driven by reduced supply following the suspension of exports from a key global manganese ore supplier due to infrastructure damage caused by a tropical cyclone. However, the price spike quickly subsided in Q3 and Q4 2024, as there was meaningful volume placed into the Mn ore market by swing suppliers who took advantage of the temporary elevated prices.

The Group recorded a higher gross profit of US$113.2 million in FY2024 (with a gross profit margin of 17%) as compared to a gross profit of US$94.8 million in FY2023 (with a gross profit margin of 16%). This was in line with the higher revenue recorded for FY2024, partly offset by lower net inventories written-back of US$7.3 million in FY2024, as compared to US$38.3 million in FY2023 recorded in cost of sales. Excluding the inventories written-back, the FY2024 gross profit margin was 16% (2023: 10%).

Other income decreased by US$20.6 million mainly due to the one-off gain of US$20.2 million from the disposal of 90% of a subsidiary in FY2023. There was no such disposals in FY2024.

Total distribution costs increased by approximately 8% in FY2024, despite a 8% decline in the total volumes of ores and alloys traded in FY2024 as compared to FY2023. This increase was primarily driven by elevated freight rates in 1H2024.

Other operating expenses decreased to US$12.8 million for FY2024, from US$24.0 million in FY2023 mainly due to:

lower depreciation and amortization expenses in the current year, due to accelerated depreciation on property, plant, and equipment that underwent major maintenance works in FY2023; and

lower furnace shut down expenses in FY2024.

A net realised and unrealised foreign exchange loss of US$11.8 million was recorded in FY2024 as compared to a net realised and unrealised foreign exchange gain of US$4.6 million in FY2023, mainly due to the translation of Malaysian Ringgit (“MYR”) denominated payables to United States Dollar (“USD”) due to the strengthening of the MYR against the USD in FY2024.

Finance costs for FY2024 increased by approximately 7% to US$29.5 million (as compared to US$27.5 million for FY2023) mainly due to the high interest rate environment.

The Group’s share of results from its associates of US$4.3 million mainly related to the operating results of its 13% interest in Tshipi é Ntle Manganese Mining (Pty) Ltd (“Tshipi”).

Income tax expense decreased by 43% to US$8.2 million in FY2024 as compared to FY2023 which is in line with the lower pre-tax profits recorded.

The Group recorded a consolidated profit after tax of US$9.7 million for FY2024 (against a consolidated profit after tax of US$18.4 million for FY2023). The Group’s basic and diluted profit per ordinary share for FY2024 was 1.22 US cents as compared to basic and diluted earnings per share of 2.45 US cents for FY2023.

The Group also recorded an EBITDA of US$76.0 million in FY2024 as compared to US$94.9 million in FY2023.

Mining

This category included the contribution from the Bootu Creek Manganese Mine (the “Mine”).

The Mine is 100% owned and operated by the Company’s wholly owned subsidiary OM (Manganese) Ltd (“OMM”). Mining activities ceased in December 2021 and the processing plant also ceased production on 24 January 2022. The Mine was placed under care and maintenance since the end of January 2022 with no further mining and processing activities.

As a result, there was no revenue in FY2024, and OMM recorded a negative contribution of US$8.1 million for the year ended 31 December 2024

The Ultra Fines Plant (“UFP”) planned production trial was conducted in December 2024. The planned production trial progressed well with yields in line with expectations. A second trial is planned to take place in Q1 2025, with optimal production restart scheduled for Q2 2025.

Smelting

This business segment covers the operations of the FeSi and manganese alloy smelter operated by OM Sarawak, and the manganese alloy smelter operated by OM Materials (Qinzhou) Co Ltd (“OMQ”) until the disposal of 90% interest of OMQ on 31 October 2023.

The smelting segment recorded revenue of US$528.0 million for FY2024 as compared to US$388.8 million for FY2023. The increase in revenue was mainly due to higher tonnage of ferroalloys produced in FY2024. The Group produced 190,517 tonnes and 317,995 tonnes of FeSi and manganese alloys respectively in FY2024 (FY2023: 139,529 tonnes and 294,432 tonnes tonnes of FeSi and manganese alloys respectively).

Despite generating higher revenue in FY2024, the smelting segment recorded a lower contribution of US$27.7 million as compared to US$31.6 million in FY2023, mainly due to net unrealised and realised foreign exchange losses of US$1.4 million and US$5.4 million in FY2024, respectively, in contrast to net unrealised and realised foreign exchange gains of US$1.2 million and US$1.6 million in FY2023.

Marketing and Trading

Revenue from the Group’s marketing and trading operations increased by 12% from US$602.1 million in FY2023 to US$675.0 million in FY2024. This increase was driven by higher volume of alloys sold as there was higher production volumes from the smelting segment. Despite generating higher revenue in FY2024, the marketing and trading segment recorded a slightly lower profit contribution of US$22.6 million in FY2024 as compared to US$23.6 million in FY2023.

Others

This segment includes the corporate activities of OMH as well as the procurement services rendered by a number of the Group’s subsidiaries.

The revenue recognised in this segment mainly related to procurement fees, logistics services and other services rendered by certain subsidiaries of the Group. Lower profit contribution of US$0.1 million from this segment in FY2024 as compared to US$3.7 million in FY2023, was mainly due to net unrealised foreign exchange losses of US$1.7 million in FY2024 as compared to net unrealised foreign exchange gains of US$0.5 million in FY2023.

FINANCIAL POSITION

The Group’s property, plant and equipment (“PPE”) as at 31 December 2024 decreased to US$408.2 million from US$426.1 million as at 31 December 2023 mainly due to PPE depreciation charge and foreign exchange revaluation, offset by PPE additions for the year.

As at 31 December 2024, the Group’s consolidated cash position was US$67.9 million (including cash collateral of US$8.3 million) as compared to US$69.7 million (including cash collateral of US$9.2 million) as at 31 December 2023. For FY2024, net cash generated from operating activities was US$83.3 million as compared to net cash generated of US$30.3 million for FY2023.

Inventories as at 31 December 2024 of US$313.9 million was higher than the inventories balance of US$292.3 million as at 31 December 2023 mainly due to higher raw material and finished goods inventory balances. There was also a US$7.2 million net write-back of previously written-down inventories during the year. The net write-back was due to a higher estimated net realisable value of inventories. As at 31 December 2024, the Group’s inventories under consignment arrangement amounted to US$40,628,000 (31 December 2023 – US$35,877,000).

Trade and other receivables increased to US$42.4 million as at 31 December 2024, compared to US$38.5 million as at 31 December 2023 mainly due to an increase in revenue in FY2024 as compared to FY2023, as well as timing differences between shipments and collections.

Total trade and other payables increased by approximately 6% to US$202.2 million as at 31 December 2024 from US$190.3 million as at 31 December 2023 mainly due to timing differences between purchases and payments to suppliers.

The Group’s total borrowings decreased from US$265.5 million as at 31 December 2023 to US$219.7 million as at 31 December 2024. The decrease was mainly attributed to the principal repayment of the Sarawak Project Finance loans of approximately US$49.5 million in FY2024, offset by a net higher utilisation of trade financing facilities as at 31 December 2024. The Group’s total borrowings to equity ratio decreased from 0.64 times as at 31 December 2023 to 0.52 times as at 31 December 2024.

Contract liabilities increased to US$47.0 million as at 31 December 2024 from US$23.3 million as at 31 December 2023 mainly due to higher upfront payments received from customers.

The Group’s net asset backing per ordinary share was 54.97 US cents per ordinary share as at 31 December 2024 as compared to 54.25 US cents per ordinary share as at 31 December 2023.

INVESTMENT IN NTSIMBINTLE MINING PROPRIETARY LIMITED

OMH has an effective 13% interest in Tshipi through its 26% strategic partnership with Ntsimbintle Holdings Proprietary Limited.

OMH (26%) and Ntsimbintle Holdings Proprietary Limited (74%) are shareholders in Ntsimbintle Mining Proprietary Limited (“NMPL”). NMPL holds a 50.1% interest in Tshipi, an independently operated and managed black-empowered manganese mining company that operates the Tshipi Borwa Manganese Mine located in the world class Kalahari Manganese field in South Africa. The Tshipi Borwa Manganese Mine currently has a production capacity of 3.3 to 3.6 million tonnes per annum.

The Group equity accounts its 13% effective interest in Tshipi’s results which equated to a contribution of US$4.3 million for FY2024 compared to US$5.1 million for FY2023.

In February 2024, Tshipi declared and paid a dividend of ZAR 300 million (approximately US$15.6 million) to its two shareholders. The Group received its share of this dividend of ZAR 33.7 million (approximately US$1.8 million, before withholding tax) from NMPL in April 2024.

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• [Editor:tianyawei]