How OM Holdings Is Steering Through Profit Challenges with Strategic Refinancing

Steady Revenue Amid Profit Pressure

OM Holdings Limited, a leading manganese and silicon alloy producer in Asia outside China, released its half-year results for 2025 showing a stable revenue stream of US$309.3 million, virtually unchanged from the prior corresponding period. However, the company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) halved to US$19.1 million, reflecting margin pressures in its smelting operations and a challenging commodity price environment.

The company reported a net loss attributable to owners of US$9.5 million, a reversal from the US$12.8 million profit in 1H 2024. This downturn was influenced by lower average selling prices for key alloys and ongoing market softness in manganese ore, compounded by increased competition in ferro-silicon markets.

Operational Adjustments and Production Guidance

OM Holdings’ Bootu Creek manganese mine remains under care and maintenance following inconsistent results from recent trials and unfavorable market conditions. Rehabilitation efforts continue as planned, focusing on environmental restoration. Meanwhile, the company’s Sarawak smelting complex, powered predominantly by renewable hydropower, operated 15 furnaces with production volumes within guidance, balancing ferro-silicon and manganese alloy outputs.

The company highlighted its flexibility to adjust production dynamically in response to market demand and raw material supply fluctuations, leveraging economies of scale to secure ore supplies ahead of competitors. This operational agility is critical amid volatile commodity prices and evolving customer needs.

Financial Health and Refinancing Success

Despite the profit squeeze, OM Holdings maintained a positive cash position with US$31.7 million in cash and equivalents at the half-year mark. The group generated US$34.6 million in net operating cash flow, aided by improved supplier payment terms and timing differences between purchases and payments.

Significantly, the company successfully refinanced its OM Sarawak project finance loans and revolving credit facilities during the period, reducing total debt and maintaining a low gearing ratio. This refinancing provides financial flexibility to navigate the cyclical challenges in the manganese and silicon markets.

Sustainability and Strategic Focus

OM Holdings continues to emphasize sustainability, with its Sarawak smelting operations achieving Scope II greenhouse gas emissions 75% lower than conventional coal-powered smelters, thanks to hydropower usage. The company has secured multiple ISO certifications, including ISO 9001, ISO 14001, and ISO 45001, and is targeting further certifications in energy management and laboratory accreditation.

Environmental initiatives such as repurposing silicon manganese slag and a rewilding project planting over 3,200 trees in FY2024 underscore its commitment to responsible operations. The company also maintains a strong focus on social and governance standards, including supplier compliance and workplace safety.

Looking Ahead

While the silicon metal segment awaits a strategic review before commercial production decisions, OM Holdings’ core assets remain fundamentally strong. The company’s low-cost, renewable energy-powered smelting complex and established customer relationships position it well to weather market volatility and capitalize on the transition to greener industrial processes.