[Ferro-Alloys.com] OMH profits in first half of 2025 (1H2025)

OM Holdings Limited (OMH) profits in first half of 2025 (1H2025) have been eroded by lower prices of ferrosilicon (FeSi) due to weaker demand from the downstream steel market.

Company’s earnings before interest, tax, depreciation and amortisation fell sharply to US$19.1 million (1H2024: US$46.6 million) despite a marginal revenue growth of US$309.3 million (US$308.4 million) primarily driven by higher manganese ores traded at higher average selling prices, offset by lower alloy volumes trades.

OMH, which is dual listed on Australian Securities Exchange and Bursa Malaysia, reported after-tax loss of US$9.6 million against after-tax profit of US$12.9 million in 1H2024.

This had resulted the group incurring basic and diluted loss per share of 1.25 US cents from earnings per share of 1.67 US cents.

“Ferrosilicon, a key product in the company’s alloy portfolio, has experienced sustained global decline since December 2024, driven by a weakened downstream steel market and increased competition from Russian-origin materials. These external factors have compressed profit margins considerably, resulting in a gross profit of US$21.6 million and a loss after tax of US$9.6 million in 1H2025.

“Gross profit margin decreased to 7 per cent in 1H2025 from 19 per cent in 1H2024. This was predominantly attributed to lower average selling prices for FeSi in 1H2025 and no inventory writebacks in 1H2025,” OMH said in a media release.

However, average selling prices for manganese ore were higher year-on-year, and average selling prices for siliconmanganese (SiMn) were too slightly higher. SiMn prices opened at US$885 per tonne CIF Japan at end-December 2024, increasing to US$965 per tonne CIF Japan at end-March 2025 before decreasing slightly to US$950 per tonne CIF Japan at end-June 2025. While demand was weak, the manganese ore market provided some support to prices in 1H2025.

During the same period, FeSi prices were down from US$1,185 per tonne CIF Japan to US$1,120 per tonne and US$1,060 per tonne respectively.

In 1H2025, OMH reported that its total distribution costs were reduced by about 24 per cent in 1H2025 due to lower freight rates.

For the group’s smelting business, OMH said its wholly-owned subsidiary OM (Materials) Sarawak Sdn Bhd posted lower revenue of US$225 million in 1H2025 (1H2024: US$254.9 million) due to lower volumes of alloys sold. The group produced 88,750 tonnes of FeSi and 153,935 tonnes of Mn alloys as compared to 97,829 tonnes of FeSi and 159,093 tonnes of Mn alloys in 1H2024.

“The smelting segment recorded a negative contribution of US$8.8 million for 1H2025 as compared to a positive contribution of US$23.4 million for 1H2024, predominantly due to the lower revenue recorded for 1H2025 and no write-back inventory adjustments,” said OMH.

OM Sarawak owns and operates a smelting plant in Samalaju Industry Park, Bintulu. As at June 30, 2025, the plant’s 15 furnaces were in operation, with seven producing FeSi and eight producing Mn alloys. Two silicon metal furnaces continue to produce FeSi in the interim and commercial production of silicon metal is contingent on strategic review.

Major maintenance for two FeSi furnaces scheduled for this year is on track. The plant’s overall production is well within guidance.

Commenting on 1H2025 financial performance, OMH executive chairman and CEO Low Ngee Tong said: “While topline growth was modest, we have continued to put the focus on the levers that we can control — cost and cash.

“The loss after tax reflects an industry worldwide compression of margins as ferrosilicon prices fell to levels that we believe are not sustainable to long-term fundamental. Operationally, our business is on a solid footing with stable cash flows, reflecting our ability to be sustainable during cyclical lows.”

OMH’s consolidated cash position stood at US$44.1 million (including cash collateral) while net cash generated from operating activities was US$34.6 million. The group’s borrowings to equity ratio declined from 0.52 times to 0.44 times, driven by lower utilisation of trade and revolving facilities, along with the successful refinancing of OM Sarawak project finance loans and revolving credit facility in 1H2025.

• [Editor:tianyawei]