OM Holdings Posts US$636 Million Revenue with 96% Smelter Utilisation in FY2025

Operational Resilience Amid Market Pressure

OM Holdings Limited (ASX:OMH) confronted a tough 2025 as global ferroalloy markets remained subdued, pressured by lingering oversupply and geopolitical uncertainties. Ferrosilicon prices fell 13% over the year despite a brief rally, while manganese alloys saw sharp price declines from a 2024 peak. Yet, the Group’s core smelting operations in Sarawak, Malaysia, demonstrated remarkable resilience, achieving an average furnace utilisation rate of 95.9% and producing 191,087 tonnes of ferrosilicon and 311,791 tonnes of manganese alloys, just shy of last year’s output despite market headwinds.

This production consistency underscores OMH’s operational discipline, particularly as the Sarawak plant completed major maintenance across all 16 furnaces and earned ISO 50001 certification for energy management, marking its fourth ISO accreditation in two years. The smelter’s ability to convert over 96% of manganese alloy production into sales highlights effective inventory management amid volatility.

Strategic Portfolio Rationalisation Strengthens Balance Sheet

In a decisive move to sharpen its focus on core smelting, OMH completed the sale of its 26% interest in Ntsimbintle Mining Proprietary Limited, the holding company for a 50.1% stake in the Tshipi Borwa manganese mine in South Africa, for approximately US$120 million. This transaction, finalised in February 2026, unlocks significant capital and reflects a broader strategic intent to recycle capital into higher-return smelting assets. Concurrently, the Group sold a 60% stake in OM Materials Qinzhou Co Ltd (OMQ), a Chinese manganese alloy smelter, retaining a 40% interest to maintain market insight while exiting direct operational exposure.

These divestments follow a pattern of portfolio optimisation that has reduced non-core asset exposure and enhanced financial flexibility. The proceeds bolster OMH’s balance sheet, enabling the Group to declare a special dividend of A$0.01 per share, a move that signals confidence in cash flow and commitment to shareholder returns. This capital return strategy was detailed in the recent announcement of the special dividend after stake sale.

Refinancing Success and Financial Discipline

OMH’s financial management was a highlight of 2025, with the successful refinancing of a US$168 million syndicated debt facility alongside US$136 million in working capital and bank guarantees. This new structure offers improved amortisation terms, extended maturities, and lower interest costs, which fell by approximately 20% year-on-year. The refinancing effort earned the Group several accolades, including the “Best Funding Solution” at the 2025 Adam Smith Awards and recognition from FinanceAsia and the Corporate Treasurer Awards.

Despite revenue slipping 3% to US$636.3 million and gross profit margin contracting to 9.8% from 17.3% in 2024, OMH generated EBITDA of US$50.7 million and a net profit attributable to owners of US$2.3 million. Notably, the second half of 2025 saw a return to profitability after a loss in the first half, reflecting operational improvements and market stabilisation. The gearing ratio improved to 0.50 times, underscoring the positive impact of refinancing and asset sales on capital structure.

Sustainability and Community Engagement Drive Long-Term Value

OMH’s annual report dedicates significant attention to sustainability, with the Sarawak smelting complex powered predominantly by renewable hydropower, resulting in lower carbon intensity relative to coal-fired peers. The Group achieved ISO 50001 certification for energy management in 2025 and secured multiple environmental approvals to repurpose over 340,000 tonnes of silicomanganese slag, advancing circular economy principles.

Community initiatives include the planting of 8,020 native trees in Similajau National Park as part of a rewilding project, and active participation in regional climate action forums and eco-industrial park programmes. OMH’s sustainability governance framework integrates climate risk assessments aligned with TCFD and ISSB standards, reflecting a proactive approach to emerging environmental regulations.

Governance and Risk Management

The Board maintains a majority of independent directors and adheres to ASX Corporate Governance Principles, balancing independence with deep industry expertise. The Executive Chairman Low Ngee Tong, who also serves as CEO, brings over four decades of sector experience, with independent Deputy Chairman Zainul Abidin Rasheed providing oversight. Risk management is integrated at the Board level, with comprehensive policies addressing financial, operational, environmental, and social risks.

OMH continues to monitor geopolitical developments, including potential US tariff changes and global trade uncertainties, maintaining operational agility to navigate market fluctuations. The Group’s detailed disclosures on financial instruments, credit risk, liquidity, and foreign exchange exposures provide transparency on risk mitigation strategies.

Outlook and What to Watch

Entering 2026, OMH faces ongoing market challenges with subdued alloy prices but is positioned with a strengthened balance sheet and a focused portfolio. The Group’s strategic emphasis on its Sarawak smelting operations, combined with disciplined capital management and sustainability commitments, forms the foundation for resilience.

Investors should watch for developments in the integration and performance of the Sarawak smelter’s new infrastructure projects, progress on the silica fume densification silo commissioning expected by August 2026, and the impact of global steel demand recovery on alloy pricing. Additionally, the Group’s ability to capitalise on low-carbon product demand amid tightening environmental regulations will be critical. The recent early bond redemption using proceeds from asset sales exemplifies OMH’s proactive financial stewardship, setting a precedent for future capital allocation decisions.