Sales Rose 18.6%. Spanish Power Costs Pushed Adjusted EBITDA Below Zero. Five Plants Are Set to Close.

Ferroglobe smelts quartz, coal and manganese ore into silicon metal and silicon- and manganese-based alloys for steel, aluminum, chemical and solar customers, from 24 plants with assets in nine countries. Third-quarter sales rose 18.6% to $369.8M and net profit was $57.9M, but a $76.8M non-cash gain on long-term power contracts, $57.6M after tax, accounted for nearly all of it. Adjusted EBITDA, a non-IFRS measure, was negative $2.4M after Spanish energy costs jumped. Management now plans to close five plants, cut overhead by about 20%, and add $85M to $115M of annual adjusted EBITDA at full run rate. Trade protection and new critical materials are the other two levers.

Analysis

Ferroglobe is a U.K. public limited company listed on Nasdaq as GSM. It was formed in December 2015 by combining Globe Specialty Metals of the United States with FerroAtlántica of Spain. It melts quartz, coal and manganese ore in electric furnaces to make silicon metal, silicon-based alloys and manganese-based alloys for steel, aluminum, polysilicon, silicone and solar producers. At the end of 2025 it had 24 electrometallurgical plants, 18 mining sites, an electrode plant and two hydro stations, with assets in the United States, Spain, France, Canada, China, South Africa, Norway, Venezuela and Argentina, and 2,935 employees. Stated annual capacity is about 330,000 tons of silicon metal, 300,000 tons of silicon-based alloys and 560,000 tons of manganese-based alloys.

The third quarter, reported on November 3, is why the desk is writing now. Quarterly sales were $369.8M, up 18.6% from a year earlier and down 2.3% from the second quarter. Net profit attributable to shareholders was $57.9M, or $0.31 per diluted share, against a loss of $12.8M a year earlier. Adjusted EBITDA, which the company reports as a non-IFRS measure, was negative $2.4M, against $13.1M in the second quarter and $18.3M a year earlier, which the company attributed mainly to higher energy costs in Spain. Management also announced plans to close five plants. Chief executive Marco Levi blamed higher energy costs resulting from the Middle East conflict and excess ferrosilicon imports into Europe.

The Human Translation: Ferroglobe runs large electric furnaces that turn rock, coal and ore into metals used in aluminum, steel, silicone chemicals and solar panels. Electricity is one of its largest costs, and Spanish power prices jumped this summer. The headline profit came from accounting gains on long-term power contracts, not from selling metal; the operations themselves lost money. The company now plans to shut five plants, run the rest harder, and rely on import duties and new specialty metals to restore profit.

Silicon metal carries the highest price per ton and, lately, the weakest margin. Third-quarter shipments were 38,173 metric tons, up 13.7% from a year earlier and down 6.5% from the second quarter, at an average price of $2,669 per ton, up 3.0% sequentially and down 9.5% from a year earlier. Revenue was $101.9M and segment adjusted EBITDA was negative $2.3M, negative in each quarter of 2026. The company said costs rose on higher North American energy and electrode prices. In 2025 silicon metal shipments fell 34.0% to 147,112 tons and the average price fell 10.4% to $2,924, a year that included furnace shutdowns in France. On the desk's arithmetic, nine-month 2026 shipments of 109,524 tons annualize to about 44% of stated capacity.

Silicon-based alloys, which management discusses mainly as ferrosilicon, swung hardest. Shipments were 59,171 tons, up 37.7% from a year earlier and down 6.0% from the second quarter, at $1,973 per ton, down 8.2% from a year earlier. Revenue was $116.7M. Segment adjusted EBITDA fell to negative $2.0M from positive $14.5M in the second quarter, which had included a $5M litigation gain in Spain. The company's presentation said U.S. demand remained solid, up 38% from a year earlier, while Europe was still hurt by low-priced imports. On the call, Levi said European ferrosilicon index prices were down 16% for the year to date and named Malaysia, Bhutan, Azerbaijan, India and Angola as sources of elevated imports.

Manganese-based alloys are now the profit center. Shipments were 85,696 tons, up 23.2% from a year earlier, at $1,330 per ton, up 9.6%. Revenue rose 35.0% to $114.0M and segment adjusted EBITDA was $11.4M, a 10.0% margin, against $4.4M a year earlier. Over nine months the segment earned $34.4M of adjusted EBITDA, about 74% of the $46.6M combined total of the three product segments on the desk's arithmetic. The company credits European Union safeguard measures on ferroalloy imports, in force since November 2025; its second-quarter presentation said manganese index prices had risen about 25% since then. Management said on the call that energy accounted for 85% of the quarter's cost-per-ton increase in manganese alloys, mainly in Spain.

Energy explains both the headline profit and the operating loss. Raw materials and energy were 51.7% of sales on the income statement, but 72.5% once a $76.8M positive fair value adjustment on long-term energy contracts is excluded, up from 67.3% in the second quarter. The company removes these power purchase agreement gains from adjusted EBITDA; chief financial officer Beatriz García-Cos said on the call that they are volatile and non-cash. The gains were $5.5M, $59.9M and $76.8M in the three quarters of 2026, $142.2M in total, after a $40.2M fair value loss on long-term energy contracts, principally in France, in the fourth quarter of 2025. The company estimated that higher energy prices cut third-quarter adjusted EBITDA by nearly $19M.

The bridge from reported to adjusted earnings is almost entirely energy accounting. Operating profit was $58.2M. After $5.2M of finance costs, $2.2M of finance income, $3.8M of exchange gains and $0.7M of tax, profit for the period was $58.2M. The company's adjusted profit, also a non-IFRS measure, removes $57.6M of after-tax energy contract gains, applies a $14.0M tax rate adjustment and adds back $0.9M of ERP implementation costs, leaving an adjusted loss of $12.8M, or $0.06 per share. Staff costs fell to $63.2M from $68.9M a year earlier and depreciation to $15.0M from $20.0M. Excluding the energy effect, management put adjusted EBITDA at about $16M.

The annual record shows how quickly the business turns. Sales were $1,650.0M in 2023, $1,643.9M in 2024 and $1,335.1M in 2025, a decline of 18.8% in the last year. Adjusted EBITDA fell from $315.2M to $153.8M to $27.6M. Net profit attributable to shareholders was $82.7M in 2023. The 2024 figure was first reported as $5.2M in February 2025 and appears as $23.5M in later filings. The company attributed the change to an impairment adjustment disclosed in its 2024 Form 20-F, which lowered the 2024 impairment charge to $43.1M from the $61.3M first reported. 2025 ended with a loss of $170.7M, or $0.91 per share. The fading of French power support is visible over the same years: net benefits under the expired EDF contract and the ARENH mechanism were $186.2M in 2023, $63.0M in 2024 and $29.2M in 2025.

The recovery management described for 2026 has not yet arrived. In February, Levi said he was optimistic that 2026 would mark a substantial improvement in market conditions and financial performance. In May he called cost pressures temporary and said he expected pricing to improve in the second half. Nine-month sales were $1,096.1M, up 9.0%, on shipments of the three core products up 14.7% to 548,475 tons, but their blended price fell 3.9% to about $1,795 per ton on the desk's arithmetic. Nine-month adjusted EBITDA was $14.1M, a margin of 1.3%, against $13.0M a year earlier. On the call, Levi said he expects the fourth quarter to remain challenging because of energy costs and weak European ferrosilicon markets.

The restructuring is the main new fact. Management plans to close five plants and shift production to its most competitive sites, lifting capacity utilization to about 80% from what Levi called less than 60%, and to cut overhead and headcount by about 20%. It expects adjusted EBITDA to improve by $85M to $115M at full run rate with minimal change to annual volumes. Levi did not name the five plants but said the South African plants at Emalahleni and Polokwane are being mothballed for lack of demand. He put upfront costs at $40M to $60M, net of a targeted $30M to $40M working capital reduction, over about 18 months. The plan also restarts capacity: the Selma plant in the United States for ferroalloys, and possibly Venezuela, where the company owns four furnaces with more than 100,000 tons of incremental capacity and awaits a license from the Office of Foreign Assets Control.

Trade policy drives results directly. In the United States, antidumping and countervailing duty investigations on silicon metal covered Angola, Australia, Laos, Norway and Thailand. Duties on Angola and Laos took effect on March 17, 2026, after final decisions in February, and the International Trade Commission found imports from Thailand negligible. Management said on the call that the final determination on Australia and Norway came on August 3 and that the U.S. silicon metal index rose 10% afterward. In Europe, ferroalloy safeguards took effect in November 2025 and, management said, face an annual review later in November 2026. Levi said the European Commission opened an interim review of antidumping duties on Chinese silicon metal on September 1 and began registering those imports on October 23, which allows retroactive duties.

The critical materials strategy is early but moving. Levi said the company shipped ferromolybdenum from its Monzón plant in Spain in the third quarter, ahead of its year-end target. The company expects additional critical materials shipments in the fourth quarter, and Levi said ferrovanadium, ferrochrome, low-carbon ferrochrome and ferroboron are at various stages of validation. He called volume figures premature. On September 16 the company submitted a summary proposal to the U.S. government covering magnesium, manganese and seven other critical materials. A final proposal is due in November, and management expects negotiations to begin in early 2027 and conclude before the end of the first quarter. No award or contract has been announced.

Public money so far is modest, and power contracts matter more. In 2024 the company obtained an €11.7M ($12.2M) grant from Spain's Ministry of Industry and Tourism under the PERTE industrial decarbonization program, toward a biocarbon plant at its Sabón site with projected capital spending above €28M ($29.1M). Ferroglobe has invested $17M in Coreshell, a developer of silicon-rich battery materials in which it holds 11.5%; Coreshell has received a $50M Department of Energy award toward a U.S. gigafactory. In France, two EDF contracts began in January 2026: a 10-year contract indexed partly to the European silicon metal index and carbon allowance futures, covering about 70% of forecast consumption at six sites through December 2035, and a four-year retail contract covering 2026 to 2029.

The balance sheet is not the immediate constraint. At September 30 the company held $93.3M of total cash against $135.3M of adjusted gross debt, a measure that excludes factoring borrowings and leases, for net debt of $42.1M, against $29.8M at the end of 2025 and net cash of $38.9M at the end of 2024. On the balance sheet, bank borrowings including factoring were $127.8M, short-term debt instruments $32.2M and lease liabilities $63.2M, and equity was $780.7M. Nine-month operating cash flow was $57.3M and capital spending $47.7M, leaving free cash flow of $9.5M. Trade and other payables rose to $232.7M from $144.9M at the end of 2025, while working capital fell $34.8M in the third quarter to $363.6M.

Capital allocation has narrowed to the dividend. The company pays $0.015 per share each quarter, about $2.8M, after a 7% increase announced in February, and bought back no shares in the third quarter after spending $4.7M on repurchases in 2025. Capital spending was $79.2M in 2024 and $63.3M in 2025, and the chief financial officer said on the call that it should fall significantly in the fourth quarter. She also said she expects no material change in working capital in the fourth quarter. The restructuring's $40M to $60M of net upfront costs over about 18 months sits against $93.3M of cash and nine-month free cash flow of $9.5M.

Ownership and leadership are concentrated. Grupo VM owns shares representing 35.9% of the voting power and has pledged most of them to secure a loan from Tyrus Capital; the 20-F warns that Tyrus may foreclose on the pledged shares. Javier López Madrid is executive chairman, and Juan and Silvia Villar-Mir de Fuentes sit on the board. The 20-F states that the company's directors and executive officers have from time to time been involved in legal and regulatory proceedings unrelated to their roles at the company. Marco Levi is chief executive and Beatriz García-Cos Muntañola is chief financial officer. Chief legal officer Thomas Wiesner stepped down on November 4, with a successor to be named. A majority of employees belong to unions, and each closure is subject to consultation with employee representative bodies in its jurisdiction.

The risks the filings name are concrete. In Spain the company buys power on a competitive wholesale market, South African power comes from Eskom at regulated rates, and the Alloy, West Virginia plant's fixed-price contract for about half its power expired in 2025 and was renewed only for part of 2026. About 57% of 2025 coal was bought from third parties, 86% of that from Colombia, and manganese ore comes mainly from South Africa and Gabon. The ten largest customers took 44.9% of 2025 sales. Mining operations depend on permit renewals, Chinese overcapacity caps ferroalloy prices, and the 20-F warns that U.S. tariff policy keeps changing. The mines supply the company's own furnaces; the U.K. annual report's strategic report and the 20-F risk factors give no reserve or resource tonnages for them.

The scenario map has three branches. In the first, Spanish power prices ease, the European safeguard review and the Chinese silicon metal case tighten import protection, 2027 silicon metal contracts reprice higher, and the closures deliver toward the $85M to $115M target, lifting adjusted EBITDA well above the 2025 level of $27.6M. In the second, energy stays costly into 2027, the closures proceed but weak European ferrosilicon pricing absorbs the savings, and adjusted EBITDA stays near breakeven while $40M to $60M of upfront costs draw down cash. In the third, trade measures disappoint, consultations delay the closures, and energy contract gains reverse as they did in the fourth quarter of 2025, leaving reported losses, rising net debt and pressure on the dividend.

The checkpoint set, stated fully. First, fourth-quarter adjusted EBITDA against negative $2.4M in the third quarter, and the size of the energy effect. Second, the names, locations and timing of the five plant closures, and the first restructuring charges. Third, the European Union's annual safeguard review later in November and the interim antidumping review of Chinese silicon metal. Fourth, 2027 silicon metal contract prices and volumes. Fifth, the final critical materials proposal to the U.S. government and any agreement by the end of the first quarter of 2027. Sixth, the Venezuela license and the Selma restart. Seventh, net debt against $42.1M and cash against $93.3M as restructuring costs begin.

The Human Translation

Ferroglobe runs large electric furnaces that turn rock, coal and ore into metals used in aluminum, steel, silicone chemicals and solar panels. Electricity is one of its largest costs, and Spanish power prices jumped this summer. The headline profit came from accounting gains on long-term power contracts, not from selling metal; the operations themselves lost money. The company now plans to shut five plants, run the rest harder, and rely on import duties and new specialty metals to restore profit.

Bottom Line

Watch fourth-quarter adjusted EBITDA against negative $2.4M and whether Spanish energy costs ease. Then watch the names and timing of the five closures, the European safeguard review later in November, 2027 silicon metal contract prices, and the U.S. critical materials talks management expects to conclude by the end of March. Net debt of $42.1M and cash of $93.3M show how much room the restructuring has.

Quick Facts

More from the research desk: GAU, GROY, OIS, IIIN, and the full library