Ferroglobe (NASDAQ:GSM) reported third-quarter results marked by weaker volumes, elevated energy costs and continued pressure from import pricing, while outlining a cost-reduction plan expected to raise annual EBITDA by about $100 million once fully implemented.
Revenue declined 2% sequentially to $370 million as total shipments fell 3% to 183,000 tons. Adjusted EBITDA was negative $2 million, compared with positive $13 million in the second quarter. Chief Executive Officer Marco Levi said the decline reflected extraordinary energy costs, primarily in Spain and associated with the Middle East conflict, as well as predatory pricing in the ferrosilicon market.
Chief Financial Officer Beatriz García-Cos said higher energy costs reduced quarterly adjusted EBITDA by nearly $19 million. Excluding those costs and a $5 million litigation benefit recorded in Spain during the second quarter, adjusted EBITDA would have been about $16 million in the third quarter, according to the company.
Cost Reduction Program Targets Higher Utilization
Levi said Ferroglobe has begun an “aggressive” cost-reduction program designed to consolidate production at its most competitive facilities, improve operating efficiency and increase capacity utilization to 80% from less than 60% currently.
The company plans to close five plants globally, although Levi did not identify the additional facilities during the call, citing the need to engage with employee representatives and other stakeholders. Ferroglobe has already announced the mothballing of its Emalahleni and Polokwane plants in South Africa because of weak demand. At the same time, it plans to restart its Selma facility to produce ferroalloys.
Ferroglobe expects to reduce its corporate and operating workforce by approximately 20%, subject to required employee consultations. The program is also intended to lower fixed costs per ton, reduce working capital by $30 million to $40 million and decrease future capital expenditures.
The company estimated upfront transformation costs of $40 million to $60 million, net of the targeted working-capital reduction, over an 18-month period. Levi said the company is considering divestitures or alternative uses, including data centers, for non-strategic plants.
Segment Results Reflect Energy and Pricing Pressure
Silicon metal revenue totaled $102 million. Volumes declined 6%, while average selling prices rose 3% sequentially to about $2,669 per ton. Cost per ton increased 3%, driven by higher energy and electrode prices in North America. The segment reported adjusted EBITDA of negative $2 million, compared with negative $3 million in the second quarter.
Levi said silicon metal pricing indicators improved during the quarter, with indices rising 10% in the U.S. and 6% in Europe. Ferroglobe’s realized prices rose 3%, though sales volumes fell to 38,000 tons, driven mainly by seasonality. Volumes were still 14% above the third quarter of 2025, he said.
Silicon-based alloys revenue fell to $117 million as volumes declined 6% to 59,000 tons. Realized pricing was essentially flat at $1,973 per ton. Adjusted EBITDA for the segment was negative $2 million, down from positive $15 million in the preceding quarter, which included the Spain litigation benefit.
García-Cos said volume and price declines accounted for approximately $2 million of the sequential EBITDA reduction in silicon-based alloys, with the rest attributable to higher energy costs and lower fixed-cost absorption in Europe. Levi said Ferroglobe declined to pursue incremental European volumes at unprofitable prices amid excess inventories and elevated imports.
Manganese-based alloys remained the company’s most profitable segment, reporting revenue of $114 million and adjusted EBITDA of $11 million, compared with $13 million in the second quarter. Volumes rose 1% to 86,000 tons and average selling prices increased 5% to $1,330 per ton. Higher energy costs, mainly in Spain, increased costs per ton, with energy accounting for 85% of the increase, García-Cos said.
Cash Flow, Balance Sheet and Critical Materials Expansion
Cash flow from operations was $26 million, supported by a $32 million release of working capital. Ferroglobe generated $6 million of free cash flow after capital expenditures of $20 million, compared with $20 million of free cash flow in the prior quarter.
The company ended the quarter with approximately $93 million in cash, adjusted gross debt of $135 million and adjusted net debt of $42 million. It paid a quarterly dividend of $0.015 per share on Sept. 29 and said its next dividend of the same amount is scheduled for Dec. 30 for shareholders of record on Dec. 22.
Ferroglobe also reported progress in its critical-materials initiative. The company began commercial shipments of ferromolybdenum during the third quarter from its Monzón, Spain, facility, ahead of its prior year-end target. It expects additional ferromolybdenum shipments in the fourth quarter, along with initial commercial shipments of ferrovanadium and ferrochromium.
During the question-and-answer session, Levi said the company also expects to conduct ferroboron trials. He said Ferroglobe’s immediate objective is to validate industrial-scale production capabilities for ferrovanadium, low-carbon ferrochrome and ferroboron before providing volume expectations for 2027.
Trade Actions and Venezuela Remain Strategic Priorities
Levi said trade-protection measures were beginning to support silicon metal pricing. The European Commission began an interim anti-dumping review of Chinese silicon metal imports on Sept. 1 and later announced registration of imports, a step that could permit duties to be applied retroactively. Levi said the European Silicon Metal Index had risen 7% since the review announcement.
In the U.S., he said the silicon metal index rose 10% following the International Trade Commission’s final determination in the case involving Australia and Norway.
Ferroglobe also continues to pursue an Office of Foreign Assets Control license needed to finalize agreements related to restarting operations in Venezuela. Levi said the company has begun discussions in Venezuela but identified reliable electricity supply as the primary operational issue. He said the license could arrive “anytime soon,” while noting it is required to conclude negotiations.
Looking ahead, Levi said the fourth quarter is expected to remain challenging because of energy costs and weak European ferrosilicon markets. However, he said the company expects its restructuring actions, improving steel-demand outlook and critical-materials expansion to support longer-term profitability.
About Ferroglobe (NASDAQ:GSM)
Ferroglobe PLC (NASDAQ:GSM) is a global producer of silicon and manganese-based alloys. The company manufactures silicon metal, ferrosilicon, manganese alloys, calcium silicon and other specialty alloy products used in the production of steel, aluminum, silicones, solar materials and other industrial goods.
Ferroglobe also operates quartz resources and produces related raw materials used in its alloy manufacturing processes. Its products support several industries, including automotive, construction, energy, chemicals, electronics and renewable energy.
