Ferroglobe PLC (NASDAQ:GSM) Q2 2019 Earnings Conference Call - Final Transcript
Sep 04, 2019 • 09:00 am ET
Good morning, ladies and gentlemen, and welcome to the Ferroglobe's Second Quarter Earnings Call. [Operator Instructions] As a reminder, this conference call may be recorded.
I would now like to turn the call over to Pedro Larrea, Ferroglobe's Chief Executive Officer. You may begin.
Pedro Larrea Paguaga
Good morning, everyone, and thank you for joining the Ferroglobe's Second Quarter 2019 Conference Call. Joining me on the call are Jose Maria Calvo-Sotelo, Deputy CFO and EVP Corporate Development and Gaurav Mehta, EVP of Investor Relations and Corporate Strategy.
Before we get started with some prepared remarks, I am going to read a brief statement. Please turn to Slide 1 at this time.
Statements made by management during this conference call that are forward-looking are based on current expectations. Risk factors that could cause actual results to differ materially from these forward-looking statements can be found in Ferroglobe's most recent SEC filings and the exhibits to those filings, which are available on our webpage, www.ferroglobe.com.
In addition, this discussion includes references to EBITDA, adjusted EBITDA and adjusted diluted earnings per share, which are non-IFRS measures. Reconciliation of these non-IFRS measures may be found in our most recent SEC filings.
Next slide please. We will first review the Q2 results across our core products; next, we will update you on the corporate initiatives we are undertaking, and particularly, the divestiture of the hydro assets and one ferroalloy plant belonging to FerroAtlantica in Spain; and lastly, we will provide an update on the market outlook for the remainder of 2019.
Next slide, please. As you have seen in our earnings press release, the second quarter results clearly reflect a continued weakening in end market demand across all of our core products and an erosion in realized pricing across most of our products.
That said, adjusted EBITDA showed an improvement quarter-over-quarter, as actions taken by the industry more broadly and also actions we took in respect of our own operations, are beginning to have a positive impact on our costs. While we were expecting the cyclical downturn to continue through Q2, the overall financial results for the quarter are still disappointing.
In the beginning of the year, we announced a number of initiatives focused on operational changes, cost cutting measures to counter a declining top line; and most importantly, ensuring that our balance sheet was de-risked and well positioned to ride out this cyclical downturn.
We will touch on all of these areas, but I want to start by highlighting a very important transaction. As you may have seen in our press release; last Friday, we successfully closed the sale of FerroAtlantica that was announced in our previous earnings call in the month of May. As a reminder, the entity we sold is the owner of 10 hydroelectric facilities and of the Cee-Dumbroa ferroalloys plant.
The closing of this transaction was the centerpiece of the cash generation plan we previously announced and is a critical factor in de-risking our balance sheet. The transaction values the assets at EUR170 million