ERMAY - ERAMET S.A. (ERMAF) Q4 2023 Earnings Call Transcript
2024-02-23 00:35:04 ET
ERAMET S.A. (ERMAF)
Q4 2023 Earnings Conference Call
February 22, 2024, 04:30 AM ET
Company Participants
Christel Bories - Chair & CEO
Nicolas Carre - CFO
Conference Call Participants
Maxime Kogge - ODDO BHF
Julien Onillon - Stifel
Fabien Le Disert - Kepler Cheuvreux
Presentation
Christel Bories
Good morning, good afternoon everyone. And welcome to this presentation of our 2023 Annual Results. Clearly, 2023 has been a very challenging year for our industry and consequently for Eramet. We have been facing a very deteriorated price environment with a huge impact on our financial results. But thanks to the recent repositioning of our portfolio on high quality assets with strong fundamentals and thanks to our continuous improvement of operating performance, we have been able to withstand the downturn and pursue our development projects. We have achieved a new record of production of nickel ore in Indonesia at Weda Bay and thanks to the rebound of our production of manganese ore in Gabon in H2, we managed to compensate for the logistic issues that we had at the beginning of the year.
Overall, our intrinsic performance in H2 has been very strong, showing our ability to react quickly to issues. Considering the very challenging environment and the rise of gross investments, we have delivered very solid cash flow and been able to maintain a robust financial structure.
In 2024, we will reach another important milestone with the start of our lithium production in Argentina this summer with a full capacity confirmed for mid-2025. And last but not least, 2023 was also marked by the successful conclusion of our first CSR roadmap with major progress. We have just launched the new one, Act for Positive Mining, which is even more ambitious and which will position Eramet as one of the leading players in responsible mining.
When we come to figures, in this depressed price environment, we have delivered an adjusted EBITDA of €772 million thanks to the significant contribution of Wed Bay. As you can see on this chart, Wed Bay contribution in 2023 has been €425 million, i.e. 55% of our total adjusted EBITDA.
And also thanks to an excellent intrinsic performance of €153 million, especially in the second half of the year. The external impact has been hugely negative with €1.3 billion of negative impact on our EBITDA and the very strong decline in price has not been compensated by the slightly positive evolution of the input cost, mainly the freight.
Intrinsic performance, as I said, reached €150 million with €230 million during the second half. After the difficult start of the year, which you remember was affected by the landslide that we had on the railway in Gabon. In addition to the volume increase, the record volume increase in Indonesia plus 85%, and also the rebound of production in Gabon after this major logistic issue, we have also benefited from a significant productivity improvement and cost reduction, which helped to improve the bottom line....
ERAMET S.A. (ERMAF) Q4 2023 Earnings Call Transcript