OM Holdings’ EBITDA Falls to US$50.7M as Revenue Dips 3%

Profitability Under Pressure

OM Holdings Limited (ASX: OMH) has revealed a significant downturn in its financial performance for the year ended 31 December 2025. The company’s profit after tax attributable to shareholders plunged 75% to US$2.3 million, down from US$9.3 million in the previous year. EBITDA also contracted sharply, falling to US$50.7 million from US$76.0 million in 2024.

This decline reflects a challenging operating environment marked by softer demand and increased competition, particularly in the ferroalloys and manganese alloy markets. Revenue dipped 3% to US$636.3 million, primarily driven by lower average selling prices amid sustained weak demand from downstream steelmakers and intensified competition from Russian-origin ferrosilicon products.

Market Dynamics and Operational Highlights

Ferrosilicon prices softened notably in the first half of 2025, dropping from US$1,185 per tonne CIF Japan at the end of 2024 to US$1,060 per tonne mid-year, before stabilising slightly towards year-end. Manganese alloy prices followed a similar trajectory, influenced by a temporary price spike in 2024 due to supply disruptions, but ultimately closing lower in 2025. These pricing pressures contributed to a gross profit margin contraction to 9.8%, down from 17.3% in 2024.

Operationally, OM Holdings’ smelting segment, which includes its Sarawak-based ferroalloys and manganese alloy production, saw revenue decline to US$474.5 million. The segment swung to a negative contribution of US$6.9 million, a stark contrast to the US$27.7 million profit recorded in 2024. Meanwhile, the mining segment, which includes the Bootu Creek manganese mine currently on care and maintenance, recorded a smaller loss compared to the prior year, reflecting reduced foreign exchange losses.

Balance Sheet and Cash Flow Considerations

The company’s total borrowings decreased slightly to US$213.1 million, aided by scheduled repayments and refinancing of project finance loans. Despite this, the cash position shrank considerably to US$23.9 million from US$67.9 million the previous year, with net cash used in operating activities amounting to US$17.8 million. Inventory levels also declined, although a US$4.3 million write-down was recorded due to lower net realisable values.

Strategic Asset Disposal and Dividend Policy

OM Holdings is on track to complete the sale of its 13% effective interest in Tshipi é Ntle Manganese Mining for approximately US$120 million. This disposal, classified as a discontinued operation, is expected to bolster the company’s liquidity and reduce net debt. Reflecting a cautious approach to cash management, the Board has resolved not to declare a final dividend for FY2025, prioritising cash retention for organic growth initiatives and debt reduction.

Looking ahead, the company faces the dual challenge of navigating subdued market conditions while leveraging the proceeds from its asset sale to strengthen its financial position. The operational restart of the Bootu Creek mine and the outcome of ongoing legal claims remain key uncertainties.