Ferrosilicon Price Decline Pushes OM Holdings to US$9.6 Million Loss Despite Cost Controls
OM Holdings reported a slight revenue increase in the first half of 2025 but faced a loss due to falling ferrosilicon prices, while maintaining strong cash flow and preparing key asset sales.
- Revenue edged up to US$309.3 million driven by higher ore volumes and prices
- Loss after tax of US$9.6 million amid sustained ferrosilicon price decline
- EBITDA dropped to US$19.1 million from US$46.6 million in 1H2024
- Consolidated cash position remained robust at US$44.1 million
- Plans to complete sale of OMQ by end-2025 and divest Tshipi Mine stake by early 2026
Steady Revenue Growth Amid Market Headwinds
OM Holdings Limited, a global player in manganese and silicon smelting, has released its interim financial results for the first half of 2025, revealing a modest revenue increase to US$309.3 million. This growth was primarily fueled by higher volumes of ore traded at improved average selling prices. However, the company faced a challenging environment with lower alloy volumes traded, reflecting broader market softness.
Ferrosilicon Price Pressure Compresses Margins
The standout challenge for OMH has been the sustained global decline in ferrosilicon prices since December 2024. This downturn is attributed to a weakened steel market downstream and intensified competition from Russian-origin materials. The resulting margin compression has significantly impacted profitability, with the company reporting a gross profit of US$21.6 million and a loss after tax of US$9.6 million for the period. EBITDA fell sharply to US$19.1 million, down from US$46.6 million in the same period last year.
Operational Resilience and Financial Discipline
Despite these headwinds, OMH’s Executive Chairman and CEO, Low Ngee Tong, emphasized the company’s focus on controllable factors such as cost management and cash flow stability. The group’s consolidated cash position stood at a healthy US$44.1 million, supported by net cash generated from operating activities of US$34.6 million. Additionally, the borrowings to equity ratio improved to 0.44 from 0.52, reflecting prudent financial management including refinancing efforts and reduced credit facility utilization.
Strategic Asset Sales on the Horizon
Looking ahead, OMH is preparing to conclude the sale of its OMQ asset by the end of 2025 and plans to divest its 13% interest in the Tshipi Mine by early 2026. These moves are expected to further strengthen the company’s balance sheet and provide additional liquidity to navigate ongoing market volatility.
Outlook in a Cyclical Industry
OM Holdings’ results underscore the cyclical nature of the ferroalloy industry, where external factors such as steel demand and geopolitical competition heavily influence pricing and margins. While the near-term environment remains challenging, the company’s stable cash flow and strategic asset rationalization position it to weather the downturn and capitalize on eventual market recovery.
Bottom Line?
OM Holdings’ disciplined approach and upcoming asset sales will be critical as ferrosilicon markets seek stability.
Questions in the middle?
- How will ferrosilicon prices evolve in the second half of 2025 and beyond?
- What impact will the sale of OMQ and Tshipi Mine stake have on OMH’s future earnings?
- Can OMH sustain operational cash flow if alloy volumes remain depressed?