Ferroglobe Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 10, 2023

There are 7 speakers on the call.

Operator

Good morning, ladies and gentlemen, and welcome to FUERGLOPE's First Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time. As a reminder, this conference call may be recorded. I would now like to turn the call over to Anis Baratawala, Ferroglobe's Vice President of Investor Relations and Corporate Strategy.

Operator

You may begin.

Speaker 1

Thank you. Good morning, everyone, and thank you for joining Ferroglobe's Q1 2023 conference call. Joining me today are Marco Levy, our Chief Executive Officer and Beatrice Garcia Kos, our Chief Financial Officer. Before we get started with some prepared remarks, I'm going to read a brief statement. Please turn to Slide 2 at this time.

Speaker 1

Statements made by management during this conference call that are forward looking are based on current expectations. 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 exhibit to those filings, which are available on our webpage, ferroglobe.com. In addition, these discussions include references to EBITDA, Adjusted EBITDA, adjusted gross debt, net debt and adjusted diluted earnings per share among other non IFRS measures. Reconciliation of non IFRS measures may be found in our most recent SEC filings. At this time, I would now like to turn the call over to Marco Levy, our Chief Executive Officer.

Speaker 2

Thank you, Anish, and good morning or good afternoon, everyone. The Q1 has been very productive, and we have achieved Significant milestones that demonstrate our commitment to deliver value to our shareholders. During the quarter, We continue to make progress in deleveraging our balance sheet by paying down debt. We are focused on managing our operations And have successfully released working capital. On the operational front, we continue to start operations As we expand our capacity and are finalizing agreements to provide long term renewable energy to our Spanish plants.

Speaker 2

Our company is at the pivotal moment in its history, ready to seize substantial growth opportunity As the largest Western producer of silicon metal, a critical component of many industrial and consumer goods and, in particular, A key material supporting the green energy transition. The global trends toward renewable energy are driving Strong growth in the solar and electric vehicle battery markets. The growth outside of China is being amplified By an increased focus toward onshore. These onshoring trends are being enhanced by incentives Such as the Inflation Reduction Act in U. S.

Speaker 2

And its equivalent in Europe, the Green Deal Plan for net 0 age, Which are focused on local production and reducing reliance on China. As the Western market leading silicon metal producer, Ferroglobe is in a unique position to capitalize on these trends, providing an opportunity that will drive strong growth for years to come. As we review Q1 results, it is important to recognize the resilience And the adaptability of our business model. Our commitment to operational excellence, innovation And cost efficiency has allowed us to maintain a positive and stable financial and operational performance During this challenging market environment, in Q1 2023, We have achieved an adjusted EBITDA of $45,000,000 Our free cash flow reached $117,000,000 underlining our ability to generate strong cash flow. At the close of the quarter, we maintained a robust Cash position of $344,000,000 and net debt of $55,000,000 During this quarter, we made significant progress in strengthening our financial position by reducing our debt By $50,000,000 Given our strong cash flow and the excess of cash on our balance sheet, We are actively studying options to reduce our overall gross debt, optimize our capital structure, and will position the company to return value to shareholders.

Speaker 2

We will provide more detailed insights in the next few months. As you may recall, we previously made a commitment to release working capital. We have delivered on that commitment We have a significant release of $131,000,000 of working capital during the quarter, in addition to what we release in the Q4. This is a direct result of the targeted actions that we have implemented And we continue to focus on optimizing our working capital. Our positive adjusted EBITDA generation combined with these improvements Positions us well to achieve our goal of turning net cash positive in the next couple of quarters.

Speaker 2

Now I'm pleased to provide an update on the progress of our operations worldwide. In Europe, we have successfully resumed our French operations as of April 1, 2023. The significant milestones will have a positive impact on our financial performance in the coming quarters As we leverage our production capacity in France and capitalize on market opportunities with our best in class cost position. We are in the final stages of finalizing long term power purchase agreements in Spain, which will provide us with competitive energy prices. Securing these contracts is a critical step in our plan to restart and secure the long term competitiveness of our Spanish facilities.

Speaker 2

I will provide further details on this in my upcoming corporate section. After restarting 2 furnaces at our Polokwane South African facility, we are ready to start the 3rd furnace. These 3 furnaces will provide 55,000 tons of additional capacity. This expansion demonstrates our ability to rapidly add capacity at very low capital intensity. It also significantly improves our geographic footprint by serving markets in Asia and in the Middle East and provides us with a considerable competitive advantage.

Speaker 2

As a testimony Of these advantages and our reputation as high quality producer, we have signed a new long term contract To supply silicon metal to a leading Asian polysilicon producer. This further solidifies our position in the solar value And demonstrating our ability to forge strong partnership with key industry players. In line with our strategy of furthering our vertical integration, we recently signed an LOI to acquire a new quartz mine, while also expanding our existing Cerro Ball quartz mine in Spain. Furthermore, Our Board has approved additional growth CapEx to expand operations at Alden, our mining operation in Kentucky, to maintain our competitive advantage. These design vis a vis actions strengthen our leadership position in the silicon metal industry and enhance Our global presence by managing complex vertical integration into quartz mining and strategic sourcing of essential raw materials.

Speaker 2

In the electric vehicle battery market, we see exceptional growth opportunity driven by silicon metals Considerable advantages over graphite, the current are not standard. These benefits include an increase In battery capacity and enable significantly faster charging times, providing important improvements to EV technology. We are working with partners to innovate towards increasing the content of high purity silicon metal in the anodes of batteries. While the current market environment presents short term uncertainty, we are focused on things that we can control and drive long term shareholder value. We are enthusiastic about the long term prospects of our company and remain confident In our ability to navigate these challenges and deliver strong results for our valued investors.

Speaker 2

Accordingly, we are reiterating our 2023 adjusted EBITDA guidance targeting a range of 2 $70,000,000 to $300,000,000 Next slide please. Let's focus on silicon metal. Silicon metal revenue was $161,000,000 in Q1, Down from $184,000,000 in Q4, a decline of 12%. Adjusted EBITDA for this segment was $31,000,000 in Q1 down 65 percent, making $89,000,000 in Q4. Our silicon metal business was down due to a challenging market environment impacting both price and volume.

Speaker 2

Volume declined 6.4 percent sequentially in Q1 to approximately 37,000 metric tons As a result of a shutdown in France due to our French energy agreement. We expect volumes to increase significantly in the second quarter As we have secured long term contracts with new customers in Asia and the Middle East and are bringing our French operations back online. Our average realized price for silicon metal sales decreased by 6.5% compared to the previous quarter, Driven by lower index pricing in the U. S. And Europe.

Speaker 2

This price decline negatively impacted adjusted EBITDA by $17,000,000 Our total cost had a negative impact of $25,000,000 to adjusted EBITDA versus the prior quarter. We continue to benefit from energy compensation agreements in France and CO2 compensation in the Q1. However, Compared to the previous quarter, we experienced less favorable impacts, negatively impacting our cost by $7,000,000 compared to the prior quarter. Additionally, we incurred increasing idling cost of $17,000,000 The chemicals markets are facing challenges driven by a weak macroeconomic environment and oversupply in China With low priced exports driving weak sales in silicones. As a result, our outlook is cautious.

Speaker 2

Next slide please. Silicon based alloys, the revenue was $135,000,000 in Q1, up 7% over the prior quarter. Adjusted EBITDA for Q1 was $22,000,000 down 41% from the prior year quarter. Sales volumes increased 23% over the prior quarter, positively impacting adjusted EBITDA by $9,000,000 Average realized pricing was down 13% over the same period as a result of low cost exports from Brazil, China, Kazakhstan and Azerbaijan, negatively impacting adjusted EBITDA by $18,000,000 Relative to the prior quarter, silicon alloys also received a lower benefit from the energy compensation agreements in France And CO2 compensation. This had a negative impact of $14,000,000 which was partially offset by favorable impact Due to year end one offs of $8,000,000 resulting in a net negative impact to cost of $6,000,000 Moving to slide 7, please.

Speaker 2

Turning now to Manganese Alloys. Manganese beta LOIS revenue was $62,000,000 in Q1, down 32% over the prior quarter. Adjusted EBITDA for Q1 was $2,000,000 down 90% from the prior quarter. Sales volumes were down over the prior Quarter negatively impacting adjusted EBITDA by $6,000,000 while average realized pricing was down 10% over the same period. This resulted in a negative impact to adjusted EBITDA of $3,000,000 The steel market continues to face challenges due to weak fundamentals in construction.

Speaker 2

While the current low spread between Manganese, Aloy and ore is concerning, We expect demand to recover in the Q2, which will help improve our margins. In Q1 2023, our costs were negatively impacted by $8,000,000 due to various factors. In the Q4, we recognized a gain from an adjustment to an earn out provision That was not repeated in the Q1. Costs were also negatively impacted by CO2 and the French energy compensation agreement relative to the prior quarter. These were partially offset by improvements in raw material costs.

Speaker 2

I will now turn the call over to Beatrice, our CFO, to review the financials. Beatrice?

Speaker 3

Thank you, Marco. Please turn to Slide 9 for a review of the income statement. As expected, our first quarter results Experience a decline relative to the 4th quarter, driven by price and volume declines Across most of our product portfolio. Revenue for the Q1 was $401,000,000 down from $449,000,000 in the prior quarter. The 11% decline from the prior quarter As a result, weaker prices across all three product lines and volume declines in silicon metal and manganese alloys.

Speaker 3

Silicon base alloys volume increased 23% over the prior quarter due to higher sales of standard grade During the Q1, raw material and energy consumption for production Declied to $255,000,000 down from $290,000,000 in the prior quarter. As a percentage of sales, cost of sales remained flat at 64%, excluding the impact of our short Power hedge in Spain. Other operating income in Q1 was $15,000,000 down from 78 $1,000,000 in Q4, driven by lower energy compensation in France versus the prior quarter. Operating profit for the Q1 was $44,000,000 versus $30,000,000 in the prior quarter. As a percentage of sales, operating profit was 11% in Q1 versus 7% in Q4.

Speaker 3

The $15,000,000 increase in operating profit in the Q1 was driven primarily by the gains from short term Power hedge in Spain, partially offset by lower volumes and other operating income relative to the prior quarter. Net financial expenses in the Q1 declined to $11,000,000 down from $17,000,000 In Q4, the decline is attributable to lower debt outstanding as we continue to execute on our deleveraging strategy. Next slide, please. Slide 10. Our adjusted EBITDA in the first quarter was $45,000,000 versus $130,000,000 in the previous quarter.

Speaker 3

Adjusted EBITDA margins decreased to 11% in the 1st quarter, down from 29% in the 4th quarter. Volume declines in the Q1 negatively impacted adjusted EBITDA by $30,000,000 The decline in volumes was partially driven by the shutdown at our French plant, where we optimized our power contract, as discussed in the prior call. These assets have since been turned on, and we expect improved volumes in the Q2. Average selling price across our portfolio declined by 4.5%, resulting in a negative price impact of $38,000,000 Cost had a negative impact of $39,000,000 mainly due to idling costs, Maintenance expenses, earn out provisions, CO2 and energy compensation, partially offset by a favorable Impact from raw materials and inventory revaluation. The results in the Q1 where as expected, even declining prices and weekend markets.

Speaker 3

As we stated in our last quarterly call, We believe the Q1 would represent the track and expect to see improvements in Q2 continuing through the second half of the year. Slide 11, please. Next slide. We ended the Q1 with a cash balance of $344,000,000 up from $323,000,000 in the prior quarter, an increase of $21,000,000 This was driven by working capital release, partially offset by the purchase of bonds in the upper market of $26,000,000 And a $70,000,000 partial repayment for Spanish government loan. Total adjusted gross debt Declined to $400,000,000 in the 1st quarter, down from $450,000,000 in the prior quarter.

Speaker 3

Net debt declined to $55,000,000 in Q1 versus $127,000,000 in the prior quarter. This represents our lowest level of net debt in the company history and is a testament to our continued focus to reduce leverage. We aim to be net cash positive in the next couple of quarters. Next slide, please. During the Q1, we generate operating cash flow of $135,000,000 up from $118,000,000 in Q4.

Speaker 3

Free cash flow in the Q1 was 100 $17,000,000 up from $104,000,000 in the prior quarter. During the quarter, We had a working capital release of $131,000,000 CapEx in the first quarter was $17,000,000 versus $15,000,000 in the 4th quarter. We continue to expect our base Level CapEx for 2023 to be around $75,000,000 with the potential to increase depending on additional spend for growth and ESG initiatives. Lastly, Cash flow from financing activities in the Q1 was negative $96,000,000 versus negative $18,000,000 in the 4th The Q1 financing cash flows includes a coupon payment of $80,000,000 And the debt repayment mentioned on the previous on the prior slide. At this time, I will turn The call back over to Marc.

Speaker 3

Next slide, please.

Speaker 2

Thank you, Beatrice. Moving to the corporate update on Slide 14. In 2022, we made the decision to limit production across our Spanish assets in response to the European energy crisis. Our flexible global footprint enabled us to move production during the volatile energy period to lower cost plant In other regions and still provide quality products to our European customers. We are in the final stage of executing 2 long term power contracts that will provide energy stability at our Spanish plant, Enabling us to maintain consistent operations and to regulate production in these plants based on market dynamics.

Speaker 2

These power agreements represent energy that is produced from renewable energy sources. One agreement is set to start on July 1, 2023, with the second one starting in January 2024. These agreements reinforce our commitment to ESNG by sourcing power from 100% renewable energy sources. During the Q1, we received approval from our Board to expand our Cerro Bal Quartz Mine in Spain, Enabling the extraction of additional 300,000 tonnes per year of extremely high quartz Quality Quotes. This critical mineral enables us to serve high end markets in chemical, solar and batteries.

Speaker 2

By completing this expansion, we are adding critical resources and optimizing maintenance costs. This combined with the expansion in Alden will ensure that we will continue to have access to high quality raw materials, further reducing our reliance on third parties and dramatically improves our operating efficiencies. We announced our strategic plan last year to become the reference in silicon metal and ferroalloys by creating value For stakeholders through innovation, to successfully execute this strategy, we understand that work Force engagement is crucial. Over the past 2 months, we have held in-depth conversations with our top 400 leaders about our strategy and culture efforts. The sessions were very successful, resulting in excitement and commitment to achieve our aspirations.

Speaker 2

With this positive moment to moment engagement, we are now well positioned to accelerate our strategy as one

Operator

We will now begin the question and answer session. Please standby, we will compile a Q and A roster. It's from the line of Lucas Pipes from B. Riley Securities. Please go ahead.

Operator

Your line is open.

Speaker 4

Thank you very much, operator. Good morning, good afternoon, everyone. Good job on the inventory side and on the full year outlook. And that's my first question. For the rest of the year, what would be roughly your expectation around cadence of EBITDA?

Speaker 4

And any drivers that you could point to be it on the volume or pricing side or cost side for that matter that would drive EBITDA towards I think it's at €80,000,000 run rate at the midpoint. Thank you very much for your additional color on that.

Speaker 2

Hey, Lucas, it's Marco. I will start answering your question. I think I touched on some of your Questions during my pitch, but let me summarize. First of all, we confirm we have reiterated our guidance Or EUR 270,000,000, EUR 300,000,000 of EBITDA for the year. The second key factor is that the outlook that we have It's positive related to our sales volumes As we have restarted our operations in France, we have a more solid Outlook on what we can do with our Spanish assets due to the energy contracts.

Speaker 2

We have a pretty solid outlook on what we can do with our Polokwane operation in South Africa. And hopefully, it's going to run full in the second half of the year. These are things that are Pretty much under our control. In terms of pricing, of course, we are in the trough. The key comment that I have to make is that our Expectations that silicon metal price in the draft was better than in the previous drafts is visible Both in Europe and in the U.

Speaker 2

S. And for the alloys Market on ferrosilicon, we will keep on leveraging on our 50% product mix On ferrosilicon specialties and foundry, and opportunistically continue to maintain our position on Ferrosilicon standard. Manganese, due to the restart of Steel operations in Europe, we see now a pickup in demand. Overall, There is due to the slow economy, there is not a great visibility on demand for the coming quarters, Also because everybody in the supply chain is counting on lower raw material prices, lower energy Lower input costs, so everybody is quite cautious on managing his inventory. So This is the key picture that I can give to you.

Speaker 4

That's very helpful. And a follow-up, What period would you expect to be the strongest based on your current outlook for the year?

Speaker 2

Well, For sure, we expect Q1 to be the weakest, and I stop there.

Speaker 4

Okay. Understood. I appreciate that. And then, you mentioned the supply agreement with an Asian polysilicon Customer. And I wonder to what extent additional offtake agreements could be in the works.

Speaker 4

And then what a typical structure looks Looks like it are these multiyear agreements? What is typically the size of those supply agreements? And what opportunity do you see in Europe and North America for additional agreements or in Asia too? Would appreciate your

Speaker 2

Yes. Look, we are as you remember, I restarted Polokwane only under the conditions That we had 2, 3 year contracts to cover the restart of this demand. And And what we did with this contract, we covered the restart of the first two furnaces. 1 has restarted in November. The second one was restarted in January this year.

Speaker 2

And now we are Planning to link the restart of the 3rd furnace to these additional contracts. So I want to reiterate that we are talking about 2, 3 years contracts.

Speaker 4

Mark, I really appreciate the color. Continued best of luck to you and your team. Thank you.

Speaker 2

Thank you, Luke.

Operator

Thank you. And the next question comes from the line of Martin Englert from Seaport Research Partners. Please go ahead. Your line is open.

Speaker 5

Good afternoon, everyone.

Speaker 2

So, my team.

Speaker 5

So circling back on volumes on the near term and I get the general expectation is for Pickup coming out of the trough in 1Q, but any goalposts when we think through the segments On 2Q relative to 1Q based on what you're seeing from Customers today taking into account their inventory position, demand that they're seeing, what we could see on silicon metal, silicon based

Speaker 2

Yes. The clearly, The key factor is France, right? And France is basically our Key footprint for silicon metal production. And we have multiyear contracts to supply silicon metal. And we agreed with our customers to supply less in the Q1.

Speaker 2

But now that we have the volume available, we are going to catch up on supplying these contracts. The other key factor is the fact that as of July, we will have Better cost position for our assets in France in Spain, sorry. And this will drive more production, I suppose, out of Sabon and our manganese plants in Invo And Monzon. And the point, as you know, Martin, we have Freightiestorical customers in the Western world. So we negotiate the supply based on our capabilities.

Speaker 2

The new factor is our expansion of sales In the Middle East and in Asia, which is related to the successful restart of Polo Kwame. These are the main factors.

Speaker 5

Okay. When thinking about Both your reduced production in France and output is for silicon metal In 1Q and kind of aligning with customers, you get the sense that there was a fairly significant destock That happened through maybe the euro footprint or maybe elsewhere, where they rightsizing inventories, you reduce production, Just trying to better align with demand expectations?

Speaker 2

I mean, if we talk about silicon metal, I think that destocking is over. So the what we are facing in the supply chain is mainly related To lack of visibility of demand, and so everybody in the supply chain is Watching like we are doing their working capital position. On the manganese alloys, I expect a pickup Of demand due to the restart of blast furnaces, steel blast furnaces in Europe in the Q1. Of course, there is a bit of e cap due to the fires of the 2 blast furnaces of AcelR and Mittal. But Overall, demand of manganese alloys is going up.

Speaker 2

Our view on ferrosilicon specialties and foundry is rather Stable. While on ferrosilicon standard, there are a lot of new dynamics, Mainly aggressive, I would say, commercial policies From Brazil, all over the world, aggressive commercial policies from Kazakhstan and Azerbaijan in Europe, Aggressive commercial policy of pharmaceutical standard from China due to the slow restart of the steel It's lower than expected restart of steel industry in China. And for the first time, we have seen significant volumes of Chinese ferrosilicon also in the United States. So in a slow economy, we've There is price pressure also related to this New events. I must say that the recent data on steel Production indicate that production is now in China is ramping up significantly, Same in India.

Speaker 2

These are the only 2 countries in the world where we see a positive trend at this stage On steel production, Europe is catching up, but the steel force seem to be rather flat Versus last year and United States has to be seen until now has been Stable at the levels of

Speaker 5

2022. Understood. Thank you for all the detail there. I want to touch on within the silicon metal segment, costs per ton, I think, were about 3,500, Which seems high and you gave some explanation in the slide deck there. But if you could maybe provide a bit more detail or if you have some ranges.

Speaker 5

At a group level on Slide Ken, you broke out a lot of the cost impact from lower energy and CO2 compensation, idling costs in France, Annual maintenance and those things, but I'm curious what that might have looked like for just the Silicon Metals segment And maybe more importantly, if it's worth $3,500 or so there for 1Q, How do we see a potential deflation there moving into the coming quarters?

Speaker 2

Well, We usually don't give specific informations about our cost position For our products also because they differ By planned, and we are not accustomed to do specific indications on these values.

Speaker 3

Martin, maybe I can put some color in Q1. So we expected From the as we said in Q4, we expect to be on the trough of the cycle from a pricing perspective as well. But on the cost We have been idling our assets in France and part of our assets in Spain. So the fixed cost Well, the lack of absorption of the fixed costs has been an important topic for us in Q1, right? And this is going to be as we restart or resuming our operations in France, this will be diluted.

Speaker 3

So we expect a better cost position going forward, yes, in compared with Q1.

Speaker 5

Do you think when you're calling up a fixed cost impact on 1Q, Do you think that was the majority there of that what was kind of elevating it on a per unit basis?

Speaker 3

Yes. I think this is the right assessment, Martin.

Speaker 5

Okay, understood. Thanks for that color. If I could one more, working capital, I think was 36% of Sales this quarter down somewhat from 39% previously. Any specific ranges? I know the intent is to kind of continue to work back towards the targets, but any specific ranges when we think about 2Q?

Speaker 2

Well, our objective is to get to run Silicon metal and ferrosilicon in the 21%, 22% and the manganese alloys in the 25%, 26% Of course, Q1 as a revenue that was extremely Low with extremely low volumes. So We did our best, and I think we achieved a working capital release that was above is Above my previous indication, we indicated in the last call between $80,000,000 $100,000,000 target release in Q1. So and we will keep on adapting our working capital performance to get to the Optimal levels that I have mentioned. Of course, due to the extreme volatility that we have been facing Since Q3 of last year, we have to take every week For every day and adjust our performance.

Speaker 5

Okay. Thank you for that. But no specific release range just yet for 2Q, right? Just kind of continuing to work back towards

Speaker 2

Well, we are balancing in Q2, we are balancing What I say between higher volumes and as a consequence, the need to have the raw materials with the Right. The level of inventories that we need to have to manage our customer portfolio.

Speaker 5

Okay. And if I could just get you to repeat, you mentioned 21% to 22% for silicon, ferrosilicon. And what was the manganese alloys? You wanted

Speaker 2

to get back to about what percent? 25%, 26%.

Speaker 5

Okay. Excellent.

Speaker 6

All right.

Speaker 5

Thanks for all the nice job navigating a difficult market. Thank you.

Speaker 2

Thank you.

Speaker 3

Thank you, Martin.

Operator

Thank you. We will now take the next question. It's from the line of Greg Bennett, Stockholder. Please go ahead.

Speaker 6

Good morning. Thank you for the call. I was curious, the I understand the expansion of this mine in Spain. You've mentioned that you're going to acquire an Additional mine, where is that located? Is that for reserves for the future?

Speaker 6

Or is that something that will produce cash flow once you acquire?

Speaker 2

Yes. Thank you for the question. I don't hide. I we purposely Don't disclose the location of the mine at this stage. We will once the negotiation is closed.

Speaker 2

But clearly, our strategy is to reinforce our back integration. We feel that In order to be competitive and win the growth in silicon metal, We need to have the best possible back integration on courts and related courts Quality. So we are moving toward 2 directions. 1, Expand the capacity of our Cerro Ball mine in Spain, which is a fantastic mine in terms of Quality, the quality of course is outstanding there. And then signing this LOI that will hopefully drive to a positive closure of the negotiation and will allow us to count on further reserves of high quality quarters.

Speaker 3

Okay. Thank you.

Speaker 6

Final question, the refinancing, with your cash balance right now, Is that invested in with rates where they are short term rates? Are you able to invest your cash balance in these high rates we're getting right now for U. S. Treasuries for instance?

Speaker 3

We hold some money markets deposits, of course, at good rates. This is what basically in the U. S. And as well a part of it in the European side.

Speaker 6

So right now, your net interest expense, excuse me, on the cash balance would be the spread would only be Somewhere in the neighborhood of 4%.

Speaker 3

Well, it's still negative. Let me put it like this, The spread.

Speaker 6

So the need to refinance your call your bonds in July, It's not pressing as much as long as we have an inverted yield curve, I guess.

Speaker 3

Well, This is what we are reiterating. So we are generating a strong cash flows, right? We are watching very closely the debt market and the opportunities that we have at the moment. We reiterate our intention to reduce our gross debt, and we'll be announcing something In the next month around the refinancing, if this has answered your question. Okay.

Speaker 6

Thanks for such a great job. Appreciate everything you guys are doing.

Speaker 3

Thank you. Thank you so much.

Operator

Thank you. That was the last question We have time for, I would like to hand back over to the speakers for final remarks.

Speaker 2

Thank you. That concludes our Q1 2023 earnings call. As we move forward, we remain focused on executing our strategic plan And optimizing our operations. In addition, we are positioning the company to capitalize on Significant opportunities in the solar energy and battery markets that we expect to drive strong growth in the coming years. Thank you again for your participation.

Speaker 2

We look forward to hearing from you on the next call. Have a great day.

Operator

That does conclude our conference for today. Thank you for participating. You may now disconnect.

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Ferroglobe Q1 2023
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