Elkem 1Q Earnings 2025 Rise on Silicones and Carbon Sales, Despite Silicon Division Weakness

Elkem

Strong Silicones and Carbon Solutions Offset Declines in Silicon Products

Elkem 1Q earnings 2025 rose by 25% year-on-year, driven by strong performance in the company’s silicones and carbon solutions divisions. Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled NKr898 million ($86 million), despite headwinds in global trade and energy markets. However, the silicon products division—which includes ferro-silicon and silicon metal—recorded a sharp decline due to production interruptions and weak demand.

Silicon Division Faces Headwinds from Tariffs and Market Disruptions

The silicon division’s EBITDA fell 28% to NKr489 million, as power curtailments in Iceland, maintenance in Norway, and uncertainty around U.S. tariffs weighed on performance. Sales volumes dropped 9% year-on-year to 106,000t. Elkem noted that tariffs announced on 2 April by the U.S. impacted silicon and ferro-silicon, despite exemptions for many other ferro-alloys. The firm warned that indirect effects of trade disputes—like weakened global demand—could continue to erode margins.

Silicones Division Up for Sale After Strong Performance

Elkem plans to divest its silicones division following a 2024 strategic review. Despite being listed as "discontinued operations," the division’s Q1 2025 sales surged 34% to 106,000t, with strength in the Asia-Pacific region. Operating income rose 16% to NKr3.9 billion, even as prices softened. Meanwhile, carbon solutions held steady with 64,000t in volume and a 4% EBITDA gain, supported by stronger sales in Brazil and specialty carbon products.

The Metalnomist Commentary

The Elkem 1Q earnings 2025 reveal a business navigating complex trade pressures while optimizing its portfolio. Strategic geographic diversification and a timely silicones divestment may help Elkem weather potential volatility in its core silicon segment.