Eramet (ERA) H1 2024 earnings summary

Executive summary

• Strong operational performance in H1 2024, with significant production growth in manganese ore (+33%), nickel ore in Indonesia (+40%), and mineral sands (+33%), despite a challenging price environment.

• Inauguration of the first direct lithium extraction plant in Argentina, with production to start in November 2024 and full ramp-up expected by mid-2025.

• Adjusted turnover for H1 2024 was €1,674m, down 12% year-over-year, mainly due to adverse price effects, especially for nickel.

• Adjusted EBITDA fell 27% to €247m, with net income, Group share at -€41m, reflecting lower prices and SLN losses.

• Deployment of a new CSR roadmap, including improved employee social protection, biodiversity commitments, and decarbonization targets.

Financial highlights

• Adjusted EBITDA of €247m in H1 2024 (including -€109m from SLN), down from €339m in H1 2023.

• Net income, Group share was -€41m (including -€72m from SLN), compared to €98m in H1 2023.

• Net debt increased by €97m to €711m, leverage at 1.0x; gearing at 29%.

• Free cash flow was significantly negative at -€521m, mainly due to growth capex and SLN losses.

• Robust liquidity position at €2.8bn as of June 30, 2024.

Outlook and guidance

• H2 2024 financial performance expected to be significantly higher, driven by a sharp rebound in manganese ore prices and favorable seasonality.

• 2024 adjusted EBITDA projected at €1.2–1.3bn, assuming current volume and price consensus.

• Capex guidance revised down to €550–600m for 2024, mainly due to delayed second lithium plant construction.

• 2024 volume targets: 7.0–7.5 Mt manganese ore (Gabon), 40–42 Mwmt nickel ore (Weda Bay), ~1 kt-LCE lithium carbonate (Centenario) in H2.