Eramet: Third-quarter 2020 turnover

Eramet: Third-quarter 2020 turnover stable, the sales of the Mining and Metals division offset the impact of the profound aerospace crisis.

News
  • Sales of €850m (-5% on third-quarter 2019)

  • Significant decline in Aubert & Duval sales: -18% from 2019, -34% over two years

  • Excellent production and sales performance from mining activities, driven by the rebound in Chinese steel production in a disrupted market environment: 
    - Increase in Q3 20 manganese ore volumes produced (+15%) and sold (+65%) 
    - Increase in nickel ore volumes produced (+20%) and exported (+6%), leading to a significant improvement in SLN cash cost to $5.24/lb in the third quarter
    - Swift ramp-up in nickel ferroalloys production at Weda Bay, with 13 kt Ni since its launch in May
    - Increase in mineral sands production (+13%), at a pace of 730 kt per year

  • Raw material sales prices sharply down overall: -26% for manganese ore and -17% for ferronickel; conversely, very strong growth in the price of nickel ore (+35%)

  • 2020 Outlook: 
    - Manganese ore production target raised to 5.8 Mt (+22% vs 2019)
    - Opening of new mining plateau in Gabon in October, enabling gradual ramp-up in production towards a capacity of 7 Mt in manganese ore by 2022
    - Nickel ore exports confirmed at 2.5 Mwmt (+54% vs 2019)

  • Factoring in the operational improvements, in particular the increased mining production, forecast EBITDA is expected to strongly improve in the second half of 2020 compared to the first half. Nevertheless, it will be significantly lower on a full-year basis.

 

Christel BORIES

Eramet Chairman and CEO

We achieved a remarkable third-quarter performance in terms of mining production in a still very volatile economic environment.

Our mining activities pursue their successful growth momentum, specifically in Gabon, which reported a manganese ore production at a pace of more than 6 Mt per year. In New Caledonia, growth in nickel ore exports took on a new dimension, up by nearly 60%. However, SLN remains fragile and the success of its rescue plan is now more crucial than ever; we are counting on the commitment of all stakeholders.

The High-Performance Alloys division was adversely affected by the collapse of air transport and its impact across the aerospace supply chain. Drastic cost adjustment measures have been taken. Moreover, with respect to its strategic review, the Group is seeking for the best solutions for Aubert & Duval’s activity, a strategic company for the sector; all options being considered.

All the Group’s teams manage business as closely as possible to their markets and customers and remain fully focused on preserving cash.