Eramet-sln Stock Earnings Reports

2025 was a difficult year for Eramet: adjusted EBITDA fell 54% to EUR 372m (from EUR 814m) driven mainly by weak commodity prices, an adverse dollar move and permitting/logistics issues; adjusted free cash flow was negative EUR 481m and net debt rose to ~EUR 1.9–2.0bn, leaving adjusted leverage at ~5.5x. The group obtained a covenant waiver for Dec-2025, drew its RCF (liquidity ~EUR 1.5bn at year-end) and preserved access to financing. Management attributes ~80% of the EBITDA decline to external factors (prices, FX, permitting) and ~20% to internal operational underperformance (notably manganese logistics and lithium ramp-up costs). Key operational notes: Centenario lithium plant ramped to ~75% of nameplate in Dec-2025 with 2026 guidance of 17–20kt LCE and a target to approach full capacity by year-end; manganese volumes in Gabon suffered from rail/terminal constraints but debottlenecking work is underway; Weda Bay suffered multiple contractor fatalities and operational/permit-driven grade dilution. Management actions: a Board-approved three-pillar funding and performance plan — (1) ReSolution performance program (50+ initiatives) to drive operational improvement and cash, (2) strategic asset review targeting sizable monetizations in 2026, and (3) an equity strengthening plan targeting ~EUR 500m capital increase (group level) to be proposed at the May 2026 AGM. Capital allocation priorities have been reset to deleveraging: CapEx guidance is cut materially to EUR 250–290m in 2026 (including ~EUR 70m debottlenecking in Gabon and ~EUR 30m finishing in Senegal), dividends are suspended for two years, and management will seek a further waiver from banks to cover 2026 while executing the plan. Near-term outlook: management expects an improving pricing environment vs 2025, manganese transported volumes of 6.4–6.8 Mt in 2026, stable mineral sands production, ramped-up lithium volumes, and continued focus on safety and restoring financial flexibility. Investors should monitor execution on the ReSolution initiatives, progress/size/timing of any asset monetizations, the terms and completion of the EUR 500m capital increase, Weda Bay permitting/RKAB evolution, and actual cash generation as lithium reaches nameplate capacity.