Ferroglobe Posts Q3 Adjusted EBITDA Loss as Energy Costs Rise

Ferroglobe PLC (NASDAQ: GSM) reported a third-quarter adjusted EBITDA loss as sharply higher energy costs outweighed pricing gains in parts of its portfolio. The company nevertheless remained free-cash-flow positive, supported by a release of working capital, and outlined overhead reductions and plant consolidation measures expected to increase adjusted EBITDA by about $100 million, plus or minus 15%, at full run rate.

Revenue declined to $369.8 million from $378.6 million in the second quarter of 2026, while shipments fell to 183,000 metric tons from 188,500 metric tons. Adjusted EBITDA was negative $2.4 million, compared with positive $13.1 million in the prior quarter, reducing the adjusted EBITDA margin to negative 0.6% from 3.5%. Adjusted diluted loss per share was $0.06, versus adjusted earnings per share of zero in the second quarter.

Ferroglobe said high energy prices reduced adjusted EBITDA by $18.5 million. Excluding that impact, the company estimated adjusted EBITDA would have been approximately $16 million. Raw material and production energy costs, excluding the impact of power purchase agreements, rose to $268 million from $255 million and increased to 72.5% of sales from 67.3%.

Mixed Performance Across Product Categories

Silicon metal revenue decreased 4% sequentially to $102 million as shipments fell 6%, including declines of 3% in Europe and 8% in North America. A 3% increase in average selling prices partly offset the lower volume. The segment posted adjusted EBITDA of negative $2.3 million, compared with negative $2.7 million in the second quarter, as pricing gains were offset by higher energy and electrode costs in North America.

Silicon-based alloys revenue fell 7% to $117 million, reflecting a 6% reduction in shipments and a 1% decline in selling prices. Adjusted EBITDA swung to negative $2 million from positive $14.5 million. Ferroglobe attributed the deterioration to higher energy costs, weaker fixed-cost absorption and the absence of a $5 million litigation gain recorded in Spain during the second quarter. The company said European volumes continued to face pressure from low-priced imports and excess supply, while U.S. demand remained solid. Total shipments were 38% higher than in the third quarter of 2025.

Manganese-based alloys delivered the strongest segment result. Revenue increased 6% sequentially to $114 million, supported by a 1% rise in shipments and a 5% improvement in average selling prices. Adjusted EBITDA was $11.4 million, down from $13 million as higher energy costs, mainly in Spain, more than offset the volume and pricing benefits. Shipments rose 23% year over year, and management expects solid volumes to continue in the fourth quarter.

Working Capital Supports Cash Generation

Cash from operations totaled $25.9 million, including a $32.3 million working-capital release and a $76.8 million power-purchase-agreement mark-to-market adjustment related to energy. Capital expenditures increased by $3.7 million sequentially to $20.3 million, leaving free cash flow—defined as operating cash flow less capital expenditure—at $5.6 million, compared with $20.4 million in the second quarter.

Adjusted gross debt edged up to $135.3 million from $130.9 million, while net debt increased to $42.1 million from $37.7 million. Ferroglobe paid $2.8 million in dividends during the quarter and made no share repurchases. The company has invested a total of $17 million in Coreshell, giving it an 11.5% ownership interest.

Cost Actions and Critical Materials Expansion

Ferroglobe said its planned overhead reductions and plant consolidation are intended to improve profitability, with an estimated full-run-rate adjusted EBITDA benefit of roughly $100 million, subject to a 15% range in either direction. The company also shipped ferromolybdenum during the third quarter and expects additional critical-material shipments in the fourth quarter.

Management said trade measures were beginning to improve business conditions in the United States and European Union, citing the EU’s China antidumping interim review and annual safeguard review. Ferroglobe also said its critical-materials expansion was ahead of schedule and that discussions with governments were progressing.

Coreshell received a $50 million U.S. Department of Energy award supporting plans for a U.S. factory dedicated to graphite-free silicon-anode batteries. Ferroglobe presented the award as evidence of the technology’s potential but did not provide a financial contribution forecast.

The company said its outlook was improving as it entered negotiations for 2027 and expects industry fundamentals to benefit from increased steel and aluminum production forecast for that year. However, its results remain exposed to volatile energy and raw-material costs, cyclical metals prices and demand, low-priced imports, trade-policy changes, currency fluctuations, supply and transportation disruptions, and operational risks at manufacturing and mining facilities.