#Norway #Oslo #Elkem #Silicones #BlueStar

Elkem's Fourth Quarter 2025 Results: A Summary

Overview
Elkem, a prominent player in the silicon-based materials sector, showcased its fourth-quarter earnings for 2025, revealing a significant drop in EBITDA to NOK 890 million from NOK 1,173 million the previous year. This downturn primarily stems from unfavorable market conditions, yet strategic initiatives such as cost management and a pivotal sales agreement for the Silicones division are proving beneficial.

Financial Performance
The company’s total operating income for Q4 2025 was NOK 7,284 million, representing a 14% decline from the same period in 2024. EBITDA experienced a notable 24% downturn. Shareholders faced a negative earnings per share (EPS) of NOK (0.28) for the quarter, with a larger year-to-date EPS of NOK (1.05). Notably, results from the Silicones division heavily influenced these figures; excluding this division, the EPS would have stood at NOK 0.61.

In light of these results, Elkem's board has proposed withholding any dividend for the financial year due to equity impacts stemming from the Silicones sale transaction.

Strategic Initiatives
In a bid to refine its operational focus, Elkem has entered into a definitive agreement to sell the majority of its Silicones division to Bluestar. This transaction, wherein Bluestar will redeem its shares as settlement, aims to enhance Elkem’s strategic positioning as a pure metals and materials entity. CEO Helge Aasen articulated that despite existing market uncertainties, Elkem's robust cost structure and market position enable the company to navigate evolving dynamics and positions itself favorably for future growth.

Division Performance
Diving into the individual divisions, the Silicon Products division confronted low prices for silicon and ferrosilicon, reporting an operating income of NOK 3,231 million, down 14% year-on-year, alongside a 53% decline in EBITDA. Meanwhile, Carbon Solutions only slightly declined in EBITDA by 38% over the year. However, the Silicones division experienced a 6% year-on-year EBITDA increase due to higher sales prices and operational improvements, reflecting its resilience.

Safety and Accountability
Safety remains a crucial focus at Elkem. Despite significant safety improvements under their Health, Safety, and Environment (HSE) framework, the company faced a tragic incident on December 22, 2025, involving an explosion at a Silicones research and development facility that resulted in injuries and fatalities. The organization is committed to thoroughly investigating the incident and ensuring robust safety measures across its operations.

Equity Position and Market Challenges
As of December 31, 2025, Elkem’s equity stood at NOK 24,026 million, equating to an equity to total assets ratio of 51%. However, concerns remain due to ongoing trade regulations that jeopardize operational stability. The current market climate necessitates continued capacity management, particularly within the Silicon Products division, coupled with optimistic forecasts for Carbon Solutions.

Additionally, while Silicones prices in China have seen an uptick, general demand remains tepid, cautioning against overoptimism concerning recovery.

Conclusion
In summary, Elkem's fourth-quarter results reflect a challenging environment mitigated by strategic decision-making and cost efficiencies. The divestment of the Silicones division positions the company for potential recovery, reinforcing its commitment to delivering sustainable solutions in the advanced materials sector.