• Eramet: Adjusted turnover of €761m in Q1 2024

    المصدر: Nasdaq GlobeNewswire / 25 أبريل 2024 00:00:00   America/Chicago

    Paris, 25 April 2024, 7:00 a.m.

    PRESS RELEASE

    Eramet: Adjusted turnover of €761m in Q1 2024

    • Adjusted turnover1 of €761m (-19%) reflecting, as expected, a strong negative price effect (-24%), while the positive volume effect is limited (+2%), penalised by the decline in SLN volumes sold
    • Good operational performance of the Group’s main mining activities compared to the unfavourable comparison base of Q1 2023:
      • +27% in manganese ore volumes sold from Gabon
      • +52% in nickel ore volumes produced in Indonesia, but -17% in volumes sold, reflecting the absence of sales of low-grade saprolites over the quarter, whose commercialization permit for 2024 is under assessment by the Indonesian government
      • +52% in zircon volumes and +36% in ilmenite2 sold from Senegal
    • Strong decline in selling prices compared to Q1 2023
    • Neutralization of SLN’s debt in the Group’s consolidated accounts3
    • Group mineral resources revised upwards on 1 January 20244:
      • +52% at 15.1 Mt-LCE in Argentina
      • +19% at 2,193 Mwmt of nickel in Indonesia
    • 2024 outlook set, as expected, against the background of a lacklustre market environment, albeit with improved price levels at the start of Q2
    • Given the prolonged halt in exports of high-grade ore from Australia, high-grade manganese ore prices should significantly increase, with a substantial impact on Eramet’s financial performance in 2024 (a $1/dmtu price variation on average over the year corresponds to a €255m impact on the Group’s adjusted EBITDA5)
    • Volume growth targets confirmed in 2024 for the Group’s main mining activities:
      • Manganese ore transported in Gabon: between 7.0 and 7.7 Mt
      • Marketable nickel ore at Weda Bay: between 40 and 50 Mwmt, depending on the schedule for approvals, of which a third is limonites
      • Lithium carbonate produced at Centenario: between 5 and 7 kt-LCE
    • Financial performance in H1 2024 expected to be significantly below that of H2 2024, given the unfavourable seasonality and the price scenario
    • Continued strict cost control and confirmation of the controlled capex plan including the continuation of growth projects (of around €700m to €750m6 financed by the Group in 2024)

    Christel Bories, Group Chair and CEO:

    "At the start of this second quarter, we remain focused on achieving our operational performance, strictly managing our costs and growth capex, especially in Argentina.

    Our mining production increased, particularly in Indonesia and Gabon, reflecting the continuous improvement in our operational efficiency. We also continued maintenance works on the Transgabonese railway to be able to increase its transport capacity.

    The market environment remains lacklustre, albeit with signs of improvement and the outlook of a strong tension on the supply of manganese ore."

    • CSR commitments

    Safety

    In Q1 2024, the safety performance improved versus the same period last year (as well as compared to Q4 2023). As a result, the TRIR7 was 0.9 at the Group level (vs. 1.1 in Q1 2023), in line with the target in the new CSR roadmap (<1.0). Nevertheless, the Group mourns the deaths of three sub-contractors in a helicopter accident on the island of Halmahera. Indonesian authorities are currently conducting an inquiry into the causes of this accident.

    Decarbonisation

    As part of the new CSR roadmap, industrial tests for partial substitution of metallurgical coke with bio reducers have started at our manganese alloys plant in Gabon.

    Community relations

    During the quarter, the Group also initiated two projects under its “Eramet Beyond” impact investment programme aimed at supporting communities, particularly with “Lire pour l’Avenir” (“Read for the future”) in Gabon. Launched in partnership with the French association Bibliothèques Sans Frontières (Libraries Without Borders) and the Gabonese Ministry of Education, this educational initiative seeks to provide learning materials to students from six high schools located in five municipalities around the Transgabonese railroad line.

    Extra-financial rating

    In March 2024, the ratings agency Moody’s (Vigeo) revised Eramet’s extra-financial performance rating upwards, scoring 69/100 (vs. 66/100 in 2021), significantly above the overall average which totalled 54/100, across all sectors.

    • Financing

    The term loan, which was renewed last year with a pool of banks, was entirely drawn for €500m in Q1 2024.

    • Eramet group adjusted turnover by activity (IFRS 5)
    (Millions of euros)1Q1 20241Q1 20232Change (€m)Change3 (%)
    Manganese 448440+8+2%
     Manganese ore activity4,5254209+45+22%
     Manganese alloys activity4193231-38-16%
    Adjusted Nickel4  259459-200-44%
     Weda Bay (share of 38.7% - excluding off-take contract)106169-63-37%
     Weda Bay (trading activity, off-take
    contract)     		3247-15-32%
     SLN6121243-122-50%
    Mineral Sands52448+20%
    GCO5240+12+30%
    Intra-group eliminations70-12+12n.a.
    ETI016-16n.a.
    Lithium000n.a.
    Holding and eliminations21+1+100%
    ERAMET GROUP adjusted4761944-183-19%

    1 Data rounded to the nearest million.
    2 Excluding Aubert & Duval, Sandouville and Erasteel, which in accordance with the IFRS 5 standard – “Non-current assets held for sale and discontinued operations”, are presented as operations in the process of being sold in 2023.
    3 Data rounded to higher or lower %.
    4 See definition in Appendix 5.
    5 Turnover linked to external sales of manganese ore only, including €17m linked to Setrag transport activity other than Comilog's ore (€13m in Q1 2023).
    6 SLN and others.
    7 Turnover for the sale of ilmenite produced by GCO to ETI until the date the Norwegian subsidiary was sold.

    N.B. 1: all the commented figures for Q1 2024 and Q1 2023 correspond to figures in accordance with the IFRS 5 standard as presented in the Group’s consolidated financial statements, unless otherwise specified.

    N.B. 2: all the commented changes in Q1 2024 are calculated with respect to Q1 2023, unless otherwise specified.

    N.B. 3: mentions of Q1, Q2, Q3 and Q4 refer to the four quarters of the financial year; mentions of H1 and H2 refer to the two half-years.

    The Group’s adjusted turnover1 including the proportional contribution of Weda Bay amounted to €761m in Q1 2024, down 19% (-22% at constant scope and exchange rates8, with +2% of currency effect). This mainly reflects an unfavourable price effect (-24%) in a depressed market environment, particularly for manganese and nickel. The volume effect was almost neutral (+2%), with the positive impact linked to growth in volumes for the manganese and mineral sands activities largely offset by the negative impact of the strong decline in SLN sales.

    Input costs decreased over the quarter versus Q1 2023. Prices of metallurgical coke and Ultra Low Phos Coke (from Colombia) declined respectively by around 20%9 and 30%9 compared to Q1 2023. On the other hand, sea freight prices have risen compared with Q1 2023 (around +22% for manganese ore exported from Gabon to China).

    Manganese

    In Q1 2024, turnover of the Manganese activities increased by 2% to €448m:

    • Sales for manganese ore activity were up 22% to €254m, driven by the increase in volumes sold externally (+27% vs. Q1 2023 impacted by non-recurring logistical incidents) but affected by an unfavourable price impact,
    • Sales for manganese alloys activity were down by 16% to €193m, owing to a sharp decline in prices (between -5% and -25% for indices in Europe), partly offset by an increase in volumes sold (+7%).

    Market trends10 & prices11

    Global production of carbon steel, the main end-product of manganese, remained almost flat (+0.6%) in Q1 2024, at 479 Mt.

    Production in China, which accounts for more than half of global steel production, declined by 2%, while it increased by 4% in the rest of the world. Production slightly declined in North America and Europe (-1% and -2% respectively), while it continued to increase in India (+10%).

    Over the quarter, manganese ore consumption remained stable at 5.1 Mt; global supply decreased by 7% to 4.9 Mt. Production strongly declined in Brazil (-74%), notably reflecting the closure of illegal mines and due to unfavourable prices, it was also down in Gabon (-9%) despite the growth in volumes produced by Comilog. South Africa was the only region to post an increase over the quarter (+12%). Production in Australia was also impacted by Cyclone Megan in March, which will strongly impact global supply of high-grade ore over the coming months.

    In this context, the overall ore supply/demand balance was in deficit in Q1 2024. Chinese port ore inventories stood slightly down to 5.8 Mt at end-March, representing 10 weeks' consumption. The decline in ore production in Q1 is expected to impact port inventories in Q2.

    The price index for manganese ore (CIF China 44%) averaged $4.3/dmtu over the quarter, down 21% vs. Q1 2023, but up very slightly compared to Q4 2023.

    Compared to high comparatives in Q1 2023, the price index for refined alloys in Europe (MC Ferromanganese) declined by 21% in Q1 2024 (averaging €1,419/t), as did that for standard alloys (Silicomanganese), down 5%, (to €1,097/t). However, indices were significantly up on Q4 2023, supported by supply tensions factoring in the sea transport crisis in the Red Sea which led to delayed deliveries from Asia.

    Activities

    In Gabon, the Moanda mine posted production of 1.9 Mt in ore, a record level for a first quarter, up 76% on Q1 2023, which was penalised by the landslide at end-2022. Transported ore volumes and ore volumes sold externally increased to a lesser extent (+21% and +27% respectively), reaching 1.6 Mt and 1.5 Mt over the period, factoring in maintenance works on the railroad line during the quarter to be able to increase the transport capacity of the Transgabonese railway.

    The FOB cash cost12 of manganese ore activity averaged $2.4/dmtu over the quarter, down 14% compared to Q1 2023. This change mainly reflects the positive impact of the increase in volumes.

    Sea transport costs per tonne increased by 24% to $1.1/dmtu vs. Q1 2023, driven by a tighter bulk sea freight market.

    Alloys production totalled 154 kt in Q1 2024 (+2% vs. Q1 2023). Sales amounted to 149 kt (+7% vs. low levels in Q1 2023) with a more favourable mix over the period.

    The alloys product margins declined in Q1 2024, mainly driven by the continuing decline in selling prices (more significantly in Europe than the United States).

    Outlook

    Global carbon steel production is expected to slightly increase in 2024. Only India, where Eramet has a strong footprint selling manganese ores, is expected to continue posting significant growth in its steel production, thanks to investments from the State in infrastructures and an automotive sector that continues to grow strongly.

    Global demand for manganese ore could decline slightly over the year, given the expected destocking of manganese alloys in China. The supply, on the other hand, is expected to decline significantly due to the extended halt of high-grade manganese ore exports from Australia.

    The current market consensus anticipates a decline of around 3% in the average manganese ore price index (CIF China 44%) compared with 2023, i.e., around $4.7/dmtu for 2024, with H1 expected to be lower than H2. This level does not factor in the recent price rebound (around $5.0/dmtu currently) which should significantly increase in 2024.

    Global demand for alloys is expected to be relatively stable while supply could trend upwards again, notably in Europe given the strong decline in electricity spot prices observed since February, which could weigh on prices in the short term.

    After rebounding in Europe in Q1 2024, notably given the conflict in the Red Sea (which also affected logistics costs), manganese alloys selling prices, may normalise in the coming months without necessarily reaching the very low levels of Q4 2023. However, the recent rebound in manganese ore prices could also lead alloys producers to seek to pass on the cost increase of this key raw material in their selling prices.

    In Gabon, annual transported ore volumes for 2024 are forecast between 7.0 Mt and 7.7 Mt. Manganese ore production will be adjusted to transportation in order to limit inventories at the mine.

    Manganese alloys production is forecast to reach around 700 kt over the year and may be adjusted to market conditions.

    Nickel

    In Q1 2024, adjusted turnover1 for the Nickel activities totalled €259m, including the proportional contribution of PT Weda Bay Nickel (“PT WBN”):

    • At SLN13, sales decreased by 50% to €121m, reflecting a strong negative volume effect coupled with an unfavourable price effect,
    • The share of turnover of PT WBN (excluding the off-take contract) contributed up to €106m, down 37% due to a strong decline in ore prices,
    • The trading activity of nickel ferroalloys produced at Weda Bay (off-take contract on plant production) contributed up to €32m to the turnover.

    Market trends14 & prices

    Global stainless-steel production, which is the main end-market for nickel, was up by 6% to 14.2 Mt in Q1 2024.

    Production in China, which accounts for nearly 60% of global production, saw growth of 7% compared to Q1 2023. Production in the rest of the world was up by 4% with a strong increase in Indonesia (+35%).

    Global demand for primary nickel increased by 8% from Q1 2023, benefitting from a recovery in demand for stainless-steel (+8%) and continued sustained demand in the batteries sector (+14%).

    In parallel to this demand growth, global primary nickel production was up 6% over the quarter. This growth was supported by NPI15 supply in Indonesia (+15%), as well as the ramp-up in new projects, notably HPAL16 (+57%) also in Indonesia. Production for intermediate products continued to grow due to the development of class I nickel refining capabilities in China, but also in Indonesia. NPI production in China as well as traditional ferronickel production declined significantly (-14% and -7% respectively), with the slowdown or shutdown of production capacity with a cost profile that is no longer competitive in the current price environment.

    The nickel supply/demand balance (class I and II17) was thus in slight surplus over the quarter. Nickel inventories at the LME and SHFE18 strongly increased, reaching 99 kt-Ni at end-March.

    In Q1 2024, the LME price average (price of class I nickel), stood at $16,611/t, down 36% vs. Q1 2023 and down 3% vs. Q4 2023 with a recovery since the start of the year, after reaching a low point.

    In parallel, the NPI19 price index (class II nickel) continued to decline, averaging $11,673/t over the quarter (-31% vs. Q1 2023 and -7% vs. Q4 2023).

    The spot price of ferronickel as produced by SLN (also class II nickel) was set at a level slightly above prices for NPI, posting a decline of 19% vs. Q1 2023 (+3% vs. Q4 2023).

    Nickel ore prices (1.8% CIF China), as exported by SLN, averaged $69/wmt over the quarter, down 33% vs. Q1 2023 (-20% vs. Q4 2023).

    In Indonesia, the official domestic price index for high-grade nickel ore (“HPM Nickel”) averaged $36/wmt20, down 42% vs. Q1 2023 (-14% vs. Q4 2023). The ore price index followed nickel price trends at the LME, with the price formula indexed to the London-based exchange, with a lag of approximately one month.

    Activities

    In Indonesia, following a campaign of additional drilling, resources at the Weda Bay mine came out to 2,193 Mwmt of nickel4,21 on 1 January 2024, with an average grade of 1.23%. They were up by 19% on 2023, with a target to certify 2,800 Mwmt of nickel in the short term.

    In Q1 2024, the mine produced 11.1 Mwmt (for 100%) of marketable ore (+52% vs. Q1 2023), including 8.6 Mwmt in saprolites (around 6.3 Mwmt high-grade and 2.2 Mwmt low-grade) and 2.5 Mwmt in limonites.

    Internal consumption of the PT WBN NPI plant increased to 0.7 Mwmt and external ore sales (at the other plants on the industrial site) totalled 6.1 Mwmt, including 5.5 Mwmt in high-grade saprolites and 0.6 Mwmt in limonites. These sales do not include low-grade saprolites (3.8 Mwmt in Q1 2023), whose commercialization permit for 2024 is under review.

    Production at the plant reached 7.4 kt-Ni in Q1 2024 (on a 100% basis), down 5%, due to maintenance scheduled at one furnace. As part of the off-take contract, the Group sold 2.8 kt-Ni over the quarter, down nearly 10%.

    In New Caledonia, mining production amounted to 1.0 Mwmt in Q1 2024, down 32% versus Q1 2023. This decline was due to societal problems and persistent difficulties obtaining operating permits. This was particularly the case for the Poum site, where operations have been suspended since August 2023, but also for the Nepoui site where production declined by nearly 40% over the period.

    As a result and factoring in the very low-price levels that led to the cancellation of sales, low-grade nickel ore exports declined to 0.2 Mwmt over the quarter (-62% vs. Q1 2023). Ferronickel production and volumes sold also declined to 9.1 kt-Ni (-14%) and 8.7 kt-Ni (-15%) respectively.

    Cash cost22 of ferronickel production increased to $8.8/lb on average in Q1 2024 (vs. $8.3/lb in Q1 2023), reflecting the impact of the decline in volumes as well as an unfavourable price and currency effect, partly offset by a decrease in energy prices.

    Outlook

    Demand for primary nickel is expected to increase in Q2 2024 from the previous quarter thanks to an improvement in stainless-steel in China and a recovery started in March by the country’s batteries sector.

    Global primary nickel supply should also increase in Q2 with increased NPI production in Indonesia and the continued ramp-up in new projects (MHP and NPI-to-Matte). Considering the low number of permits issued to date by the Indonesian government, there are current tensions in domestic ore supply in Indonesia, resulting in a premium on ore sold by PT WBN.

    The overall nickel market’s surplus is thus expected to continue in 2024, albeit to a lesser extent than in 2023.

    Nickel prices on the LME have recently rebounded (around $19,000/t). This is notably due to the American and British sanctions imposed in April against Russia regarding nickel imports and exchanges in metal markets23. However, the impact of these sanctions on the coming months remains uncertain.

    In Indonesia, subject to permitting currently under review, external sales volumes for nickel ore produced in Weda Bay (on a 100% basis) should reach between 40 and 50 Mwmt, of which around a third in low-grade limonite for HPAL plants and an average grade slightly below that of 2023.

    In New Caledonia, SLN continues to face major challenges and its financial situation remains critical. In addition, the mining activities it operates in the Northen Province have been suspended since mid-April. The administrative process for resumption is underway.

    In order to help SLN find more sustainable solutions enabling the entity to ensure its continuity as a going concern, while preserving the Group’s balance sheet, the French State and Eramet reached an agreement, which was signed in April. The latter notably concerns the conversion of existing loans to SLN into an instrument akin to equity (undated fixed rate subordinated bonds, “TSDI”) enabling the neutralisation of the entity’s debt on the Group’s consolidated financial statements (€320m in total as of 31 March 2024).

    Furthermore, Eramet reiterates its decision not to provide any further financing to SLN.

    Mineral Sands

    The Mineral Sands activity reported turnover up 20% to €52m in Q1 2024, reflecting growth in sold volumes.

    Market trends & prices24

    In a macroeconomic context that remains unfavourable for the ceramics sector, the main end-market for zircon, global demand for this product declined over the quarter versus Q1 2023, despite replenished inventories among European ceramists. Zircon production also declined, owing to production adjustments by some producers, resulting in a supply/demand balance in slight surplus.

    Zircon market prices were down 10% to $1,900/t FOB in Q1 2024 (stable vs. Q4 2023).

    Global demand for TiO225 pigments, the main end-market for titanium-based products26, recovered in Q1 2024, notably driven by the end of destocking among Western producers. Supply for titanium-based products continued to grow, resulting in a market that remained in surplus.

    In Q1 2024, the market price for ilmenite as produced by Grande Côte Operations (“GCO”) was $300/t FOB, down 9% from Q1 2023 (stable vs. Q4 2023).

    Activities

    In Senegal, mineral sands production at GCO significantly increased, ending at 192 kt over the quarter (+71%), given the favourable comparatives following a major breakdown in equipment which affected Q1 2023.

    This progress reflects both the improved equipment availability and an increase in the average heavy metal grade of the sands being mined over the period.

    Ilmenite volumes produced stood at 116 kt, up 51%, and in line with the trend for mineral sands production. Ilmenite external sales reached 75 kt, including volumes linked to the long-term supply contract signed with ETI27, which is now considered an external customer. At comparable scope (including ETI sales), ilmenite sales increased by 36%2 vs. Q1 2023.

    Zircon volumes produced increased by 49% to 14 kt vs. Q1 2023, with sales volumes up 52% to 13 kt.

    Outlook

    Demand for zircon could post an increase in 2024, notably driven by government policy measures to support the renovation sector in China. However, the market should remain in surplus due to the arrival of new production capacity in Australia, therefore sustaining the pressure on prices started at end-2023.

    Demand for titanium-based products, notably ilmenite, could also increase, driven by China, and factoring in low inventory levels among TiO2 pigment producers. Supply, however, is expected to remain in surplus, factoring in the additional capacities in China, leading to lower average price levels over the year.

    In Senegal, mineral sands production in 2024 is still expected to rise to more than 800 kt-HMC.

    Lithium

    Market trends & prices 28

    Lithium carbonate prices (battery-grade, CIF Asia) were down nearly 80% in the first quarter versus Q1 2023, averaging $13,971/t-LCE (-30% vs. Q4 2023). This decline is notably owing to the slowdown in electric vehicle sales worldwide excluding China, coupled with destocking among producers of cathodes and batteries.

    Activities

    In Argentina, lithium resources from the salar in Centenario-Ratones have been reassessed and increased by 52% totalling 15.1 Mt-LCE4,21 on 1 January 2024 (vs. 1 January 2023). The average grade for these resources increased by 16% to 407 mg/L.

    The construction of the Centenario lithium plant (Phase I), launched in 2022 is now nearly 95% complete.

    At full capacity, Phase I production is expected to reach 24 kt-LCE with a cash cost12 positioned in the first quartile of the industry cost curve (estimated at approximately $4.5 to $5.0 per kt-LCE). The annual EBITDA (at 100%) is estimated between $210 million and $315 million, based on a long-term price assumption ranging from $15 to $20 per kt-LCE.

    Outlook

    Demand should continue to grow in 2024 (estimated around +25%), driven by the increased sales of electric vehicles in China and the emerging energy storage market.

    Strong growth in supply is also expected in 2024, driven by the arrival of new projects on the market as well as the start of production of in expanded existing mines, albeit conditional on price trends. In the current environment, although margins for most producers remain positive, some high-cost players were forced to stop their production (spodumene in Australia and China), put their plants on maintenance and further delay their proposed expansions.

    The market consensus (battery-grade CIF Asia lithium carbonate), which currently averages around $15,200/t-LCE in 2024 expects an improvement from Q2.

    In 2024, production volumes of lithium carbonate (battery-grade) remain estimated between 5 and 7 kt-LCE (100% basis) in H2.

    • Outlook

    Despite declining inflation in Europe, the macroeconomic fundamentals remain depressed at the start of the second quarter. Europe’s economy suffers from high interest rates while the US economy is showing more resilience. In China, industrial production is up significantly but is not enough to offset the construction crisis which continues to worsen. This difficult macroeconomic environment, combined with geopolitical instability and uncertainties surrounding a number of elections, will continue to weigh on demand across all our markets. However, supply is expected to decline significantly in the manganese ore market in 2024, due to the extended suspension of exports of high-grade ore from Australia.

    In 2024, freight prices should reach higher levels than in 2023, especially given that uncertainties persist over the situation in the Red Sea. Declining from 2023, the price of reductants remains at high levels.

    Volume growth targets over the year are confirmed at:

    • Between 7.0 and 7.7 Mt of manganese ore transported in Gabon,
    • Between 40 and 50 Mwmt of marketable nickel ore at Weda Bay, depending on the schedule for approvals, of which a third is limonites,
    • Between 5 and 7 kt-LCE of lithium carbonate produced at Centenario.

    The average price consensus29 and exchange rate for the year30 is currently:

    • $4.7/dmtu for manganese ore (CIF China 44%); this level does not account for the recent price rebound (currently around $5/dmtu) that should significantly increase in 2024,
    • $16,800/t for LME nickel,
    • $15,200/t-LCE for lithium carbonate (battery-grade, CIF Asia),
    • The €/$ exchange rate expected at 1.09.

    Invoiced selling prices for manganese alloys should remain below 2023 on average for the year.

    The price of ferronickel is expected to remain slightly above the SMM NPI 8-12% index. Domestic prices for nickel ore sold in Indonesia are indexed to the LME and change accordingly.

    Sensitivity of adjusted EBITDA to the price of metals and to the exchange rate are presented in Appendix 4. As a reminder, a $1/dmtu high-grade manganese ore price variation on average over the year corresponds to a €255m impact on the Group’s adjusted EBITDA.

    For illustrative purposes, based on the current consensus prices for the year and the volume target range detailed above, adjusted EBITDA is expected to be between €750m and €900m in 2024. Financial performance in H1 2024 is also expected to be significantly below that of H2 2024, given the unfavourable seasonality, but also market prices that are expected to improve in H2.

    The amount of investments financed by the Group6 is confirmed between €700m and €750m in 2024, of which:

    • Current capex: close to €250m,
    • Growth capex: close to €500m, notably aimed at sustaining growth in production and transport for ore in Gabon (around €150m), as well as to develop the Lithium project in Argentina (around €250m).

    Calendar

    30.05.2024: Shareholders’ General Meeting

    25.07.2024: Publication of 2024 half-year results

    24.10.2024: Publication of 2024 Group third-quarter turnover

    ABOUT ERAMET

    Eramet transforms the Earth’s mineral resources to provide sustainable and responsible solutions to the growth of the industry and to the challenges of the energy transition.

    Its employees are committed to this through their civic and contributory approach in all the countries where the mining and metallurgical group is present.

    Manganese, nickel, mineral sands, lithium, and cobalt: Eramet recovers and develops metals that are essential to the construction of a more sustainable world.

    As a privileged partner of its industrial clients, the Group contributes to making robust and resistant infrastructures and constructions, more efficient means of mobility, safer health tools and more efficient telecommunications devices.

    Fully committed to the era of metals, Eramet’s ambition is to become a reference for the responsible transformation of the Earth’s mineral resources for living well together.

    www.eramet.com

    INVESTOR CONTACT

    Director of Investor Relations

    Sandrine Nourry-Dabi

    T. +33 1 45 38 37 02

    sandrine.nourrydabi@eramet.com

     

     

         		PRESS CONTACT

    Media Relations Manager

    Fanny Mounier

    T. +33 7 65 26 46 83

    fanny.mounier@eramet.com

     

    Appendix 1: Quarterly turnover (IFRS 5)

    € million1Q1 2024Q4 2023Q3 2023Q2 2023Q1 20235
          
    Manganese448504528505440
    Manganese ore activity2254288330262209
    Manganese alloys activity2193216198244231
    Nickel153215261228290
    Adjusted Nickel3,4259356396356459
    Mineral Sands 5284559344
    GCO5272487940
    Intra-group eliminations501-11-16-12
    ETI011183116
    Lithium00000
    Holding, elim. and others 2(1)031
    Eramet group published
    financial statements    		655803845828775
    Eramet group adjusted3,4761943980956944

    1 Data rounded to the nearest million.
    2 See financial glossary in Appendix 5.
    3 Adjusted turnover defined in the financial glossary in Appendix 5.
    4 Excluding Aubert & Duval, Sandouville and Erasteel, which in accordance with the IFRS 5 standard – “Non-current assets held for sale and discontinued operations”, are presented as operations in the process of being sold in 2023.
    5 Adjusted turnover restated in Q1 2023, following update of indicator definition (see 2023 half-year results press release published on 26 July 2023).

    Appendix 2: Productions and shipments

    In thousands of tonnes Q1 2024Q4 2023Q3 2023Q2 2023Q1 2023 
                 
    MANGANESE
    Manganese ore and sinter
    production     		1,9262,6202,1491,5431,097
    Manganese ore and sinter
    transportation    		1,6381,7372,0381,4891,359
    External manganese ore sales 1,4661,6461,8301,2451,158
    Manganese alloys production154153171160151
    Manganese alloys sales 149175154170140
                 
    NICKEL 
    Nickel ore production (in thousands of wet tonnes)      
    SLN1,0141,4221,4611,4051,482 
    Weda Bay Nickel (100%) – marketable production (High-grade Saprolites)6,3424,8984,2473,8023,958 
    Ferronickel production – SLN 9.111.712.89.710.6 
     

    Low-grade nickel ferroalloys
    production – Weda Bay Nickel (kt of Ni content – 100%)    		7.48.79.07.97.8 
     

    Nickel ore sales
    (in thousands of wet tonnes)     		      
    SLN247668675734657 
    Weda Bay Nickel (100%)6,0799,7618,3237,7537,318 
    o/w Saprolites5,4798,7348,3237,7537,318 
             Limonites6001,027--- 
    Ferronickel sales – SLN 8.710.913.210.110.2 
     

    Low-grade nickel ferroalloy sales – Weda Bay Nickel/Off-take Eramet (kt of Ni content)    		2.83.83.53.93.1 
          
    MINERAL SANDS  
    Mineral Sands production 192161161194112
    Ilmenite production11611310212977
    Zircon production141113159
    Ilmenite sales (external)75132588820
    Zircon sales13178149

    Appendix 3: Price and index

     Q1 2024Q4 2023Q1 2023Chg. Q1 2024 – Q1 20238Chg. Q1 2024 – Q4 20238
          
    MANGANESE     
    Mn CIF China 44% ($/dmtu)14.294.275.44-21%+1%
    Ferromanganese MC - Europe (€/t)11,4191,3501,808-22%+5%
    Silicomanganese - Europe (€/t)11,0979341,149-5%+17%
          
    NICKEL     
    Ni LME ($/t)216,61117,19126,079-36%-3%
    Ni LME ($/lb)27.537.8011.83 -36%-3%
    SMM NPI Index ($/t)311,67312,57616,986-31%-7%
    Ni ore CIF China 1.8% ($/wmt)469.486.6103.0-32%-20%
    HPM5 Nickel prices 1.8%/35% ($/wmt)364262-42%-14%
                 
    MINERAL SANDS    
    Zircon ($/t)61,9001,9002,100-10%-
    Chloride ilmenite ($/t)7300300302-9%-


    Lithium    
    Lithium carbonate, battery-grade, CIF Asia
    ($/t LCE)9    		13,97120,09668,000-79%-30%

    1 Quarterly average for market prices, Eramet calculations and analysis.
    2 LME (London Metal Exchange) prices.
    3 SMM NPI 8-12%.
    4 CNFEOL (China FerroAlloy Online), “Other mining countries”.
    5 Official index for domestic nickel ore prices in Indonesia.
    6 Market and Eramet analysis (premium zircon).
    7 Market analysis, Eramet analysis.
    8 Eramet calculation rounded to the nearest decimal place.
    9 Lithium carbonate price index: Fastmarkets – battery-grade spot price CIF Asia

    Appendix 4: Sensitivities of Group adjusted EBITDA

    SensitivitiesChangeImpact on adjusted EBITDA

     
    Manganese ore prices
    (CIF China 44%)    		+$1/dmtuc.€255m1
    Manganese alloys prices+$100/tc.€65m1
    Ferronickel prices - SLN+$1/lbc.€95m1
    Nickel ore prices (CIF China 1.8%) - SLN+$10/wmtc.€30m1
    Nickel ore prices (HPM nickel) – Weda Bay+$10/wmtc.€160m1
    Lithium prices (lithium carbonate, battery-grade, CIF Asia)+$1,000/t LCEc. €5m
    Exchange rate-$/€0.1c.€175m
    Oil price per barrel (Brent)+$10/bblc.-€15m1

    1 For an exchange rate of $/€1.11.

    Appendix 5: Financial glossary

    Consolidated performance indicators

    The consolidated performance indicators used for the financial reporting of the Group's results and economic performance and presented in this document are restated data from the Group's reporting and are monitored by the Executive Committee.

    Turnover at constant scope and exchange rates

    Turnover at constant scope and exchange rates corresponds to turnover adjusted for the impact of the changes in scope and the fluctuations in the exchange rate from one financial year to the next. The scope effect is calculated as follows: for the companies acquired during the financial year, by eliminating the turnover for the current period and for the companies acquired during the previous period by integrating, in the previous period, the full-year turnover; for the companies sold, by eliminating the turnover during the period considered and during the previous comparable period. The exchange rate effect is calculated by applying the exchange rates of the previous financial year to the turnover for the year under review.

    Adjusted turnover

    Adjusted turnover is presented to provide a better understanding of the underlying operating performance of the Group's activities. Adjusted turnover corresponds to turnover including Eramet's share of the turnover of significant joint ventures accounted for using the equity method in the Group's financial statements, restated for the off-take of all or part of the business activity.

    As of 31 December 2023, turnover was adjusted to include the contribution of PT Weda Bay Nickel, a company in which Eramet owns a 38.7% indirect interest. Eramet owns a 43% interest in Strand Minerals Pte Ltd, the holding which owns 90% of PT Weda Bay Nickel and is booked in the Group’s consolidated financial statements under the equity method. An off-take agreement for nickel ferroalloys production (NPI) is in place with Tsingshan, with Eramet holding a 43% interest, and Tsingshan 57%.

    A reconciliation with Group turnover is provided in Note 5 to the Group's consolidated financial statements.

    EBITDA (“Earnings before interest, taxes, depreciation and amortisation”)

    Earnings before financial revenue and other operating expenses and income, income tax, contingencies and loss provision, and amortisation and impairment of property, plant and equipment and tangible and intangible assets. 

    Adjusted EBITDA

    Adjusted EBITDA is presented to provide a better understanding of the underlying operating performance of the Group's activities. Adjusted EBITDA corresponds to EBITDA including Eramet's share of the EBITDA of significant joint ventures accounted for using the equity method in the Group's financial statements.

    As of 31 December 2023, EBITDA was adjusted to include the proportional EBITDA of PT Weda Bay Nickel, a company in which Eramet owns a 38.7% indirect interest. Eramet owns a 43% interest in Strand Minerals Pte Ltd, the holding which owns 90% of PT Weda Bay Nickel and is booked in the Group’s consolidated financial statements under the equity method.

    A reconciliation with Group EBITDA is provided in Note 5 to the Group's consolidated financial statements.

    Adjusted leverage

    Adjusted leverage is defined as net debt (on a consolidated basis) to adjusted EBITDA (as defined above), as PT Weda Bay did not have any external debt during the 2022 and 2023 financial years.

    However, in the future, should other significant joint ventures restated for adjusted EBITDA have external debt, net debt will be adjusted to include Eramet's share in the external debt of the joint ventures (“adjusted net debt”). Adjusted leverage would then be defined as adjusted net debt to adjusted EBITDA, in compliance with a fair and economic approach to Eramet’s debt.

    Manganese ore activity

    Manganese ore activity corresponds to Comilog's mining activities (excluding the activity of the Moanda Metallurgical Complex, “CMM”, which produces manganese alloys) and Setrag's transport activities.

    Manganese alloys activity

    Manganese alloys activity corresponds to the plants that transform manganese ore into manganese alloys. It includes the three Norwegian plants comprising Eramet Norway (“ENO”, i.e., Porsgrunn, Sauda, and Kvinesdal), Eramet Marietta (“EMI”) in the United States, Comilog Dunkerque (“CDK”) in France and the Moanda Metallurgical Complex (“CMM”) in Gabon.

    Manganese ore FOB cash cost

    The FOB (“Free On Board”) cash cost of manganese ore is defined as all production and overhead costs (R&D including exploration geology, administrative expenses, sales expenses, overland transport expenses), which cover all stages of ore extraction through to shipping to the port of shipment and loading, and which impact the EBITDA in the company's financial statements, over tonnage sold for a given period. This cash cost does not include sea transport or marketing costs. Conversely, it includes the mining taxes and royalties from which the Gabonese State benefits.

    SLN’s cash cost

    SLN’s cash cost is defined as all production and overhead costs (R&D including exploration geology, administrative expenses, logistical and commercial expenses), net of by-products credits (including exports and nickel ore) and local services, which cover all the stages of industrial development of the finished product until delivery to the end customer and which impact the EBITDA in the company’s financial statements, over tonnage sold.

    Ex-Works cash cost for lithium carbonate

    The Ex-Works cash cost for lithium carbonate produced by Eramine is defined as all the production and structure costs covering the entire extraction and refining stages required to make the finished or final product upon leaving the plant, and which have an impact on EBITDA in the company's financial statements, over tonnage sold for a given period. This cash cost does not include land and sea transport costs, mining taxes and royalties paid to the Argentine State, or marketing costs.

    Appendix 6: Footnotes

    1 Definitions for adjusted turnover and adjusted EBITDA are presented in the financial glossary in Appendix 5
    2 At comparable scope, i.e., a total of 55 kt in Q1 2023, including 35 kt of internal sales to ETI
    3 Conversion of the existing debt of SLN into undated fixed-rate subordinated bonds (“TSDI” – Titres Subordonnées à Durée Indéterminée), an instrument akin to equity
    4 Total mineral resources (“inferred”, “indicated” and “measured”) for nickel and drainable for lithium as of January 1, 2024, see section 1.3 of the 2023 Universal Registration Document entitled “Exploration results, mineral resources and ore reserves”
    5 See Appendix 4 Sensitivities of Group adjusted EBITDA

    6 Excluding Tsingshan's capital contributions to the Centenario project
    7 TRIR (total recordable injury rate) = number of lost time and recordable injury accidents for 1 million hours worked (employees and subcontractors)
    8 See Financial glossary in Appendix 5
    9 Source: Resources-net CAMR for Nut coke spot price, Europe; Eramet analysis for Ultra Low Phos Coke (from Colombia)
    10 Unless otherwise indicated, market data corresponds to Eramet estimates based on World Steel Association production data
    11 Unless otherwise indicated, price data corresponds to the average for market prices, Eramet calculations and analysis; manganese ore price index: CRU CIF China 44% spot price; manganese alloys price indices: CRU Western Europe spot price
    12 See Financial glossary in Appendix 5
    13 SLN and others
    14 Unless otherwise indicated, market data corresponds to Eramet estimates
    15Nickel Pig Iron (“NPI”)
    16 High Pressure Acid Leach
    17 Class I: produced with a nickel content above or equal to 99%; Class II: produced with a nickel content below 99%
    18 LME: London Metal Exchange; SHFE: Shanghai Futures Exchange
    19 SMM NPI 8-12% index
    20 For nickel ore with 1.8% nickel content and 35% moisture content. Indonesian prices are set according to domestic market conditions, but with a monthly price floor based on the LME, in compliance with a government regulation published in April 2020.
    21 Certified by the JORC Code
    22See financial glossary in Appendix 5
    23 LME et CME
    24 Unless otherwise indicated, price data corresponds to the average for market prices, Eramet calculations and analysis; Source Zircon premium (FOB prices): Market and Eramet analysis; Source CP slag (FOB prices): Market and Eramet analysis
    25 c.90% of titanium-based end-products
    26 Titanium dioxide slag, ilmenite, leucoxene and rutile
    27 Contract signed as part of the sale of the Norwegian subsidiary to INEOS at end-September 2023
    28 Unless otherwise indicated, price data corresponds to the average for market prices, Eramet calculations and analysis; Lithium carbonate price index: Fastmarkets – battery-grade spot price CIF Asia
    29 Eramet analysis based on a panel of the main sell side and market analysts
    30 Bloomberg forecast consensus as of 31/03/2024 for the year 2024

    Attachment


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