#Norway #Oslo #Elkem #BBB- rating #Scope Ratings

Scope Puts Elkem's BBB- Rating Under Review

In a recent announcement, Scope Ratings has placed Elkem's issuer rating of BBB- under review, suggesting the possibility of an upgrade in the near future. This decision comes in light of Elkem's commitment to undergo a strategic review of its Silicones division, which Scope plans to follow closely. The review reflects the company's intent to enhance its operational strategies to stay competitive in the global market.

Background on Elkem

Elkem is recognized as one of the forefront providers of silicon-based materials, dedicated to crafting a sustainable future through innovation. Established in 1904, Elkem boasts a rich history and a diverse workforce of over 7,400 employees. The company specializes in producing advanced silicones, silicon products, and carbon solutions that contribute to sectors like electric mobility, digital communications, health, and personal care.

In 2023, Elkem reported impressive fine-tuning of its revenue, recording an operating income of NOK 35.5 billion. The company’s commitment to sustainability has been acknowledged through strong CDP ratings, achieving an 'A' on Forests and 'A-' on Climate Change and Water Security. Elkem's operations are rooted in utilizing natural raw materials powered by renewable energy, evidencing its mission to help create smarter and more sustainable cities.

Implications of the Rating Review

The decision by Scope to monitor Elkem's BBB- rating closely serves multiple purposes. First, it signals the agency’s recognition of the company's evolving strategy as it reevaluates its Silicones division. The Silicones sector is crucial to Elkem’s portfolio, covering a wide range of applications from industrial usage to consumer products. This strategic review could unveil new opportunities for growth and innovation, aligning with changing market dynamics and customer preferences.

The BBB- rating currently reflects a stable risk profile, which means that while Elkem faces challenges, it maintains an adequate capacity to meet its financial commitments in the short to medium term. Any potential rating upgrade would be reflective of improved operational performance or strategic advancements that in turn bolster investor confidence and market presence.

Future Prospects

As Elkem embarks on this journey of strategic reassessment, there lies potential for significant changes in not just the Silicones division but potentially other aspects of its operations as well. Stakeholders are keenly awaiting updates on the progress of the strategic review, which is expected to influence the future trajectory of the company. As a part of its commitment to transparency, Elkem may provide regular updates on developments related to the Silicones review and its implications for the company as a whole.

Investors and analysts alike will be keeping a close eye on these movements, as they evaluate the potential impacts on Elkem’s financial structuring and market performance. The combination of Elkem's historic foundation and its willingness to adapt and innovate makes it a company to watch in the coming months.

For further inquiries regarding this update, interested parties can contact Odd-Geir Lyngstad, VP of Finance and Investor Relations, via the provided contact information.

In conclusion, as Elkem navigates its strategic review and positions itself for possible upgrades in rating, it remains a key player in the silicon-based materials sector. The outcome of this endeavor could very well reframe its approach to market challenges and opportunities ahead.