Elkem Asa Ord

Okay, I think we're ready to start. Good morning and welcome to Elkem's first quarter results presentation. My name is Olger Lindstrøm. I'm responsible for investor relations here in Elkem. To take us through today's agenda, we have CEO Helge Olsen and CFO Morten Viga. Helge will go through the highlights for the quarter, the market update, and the outlook for the second quarter. CFO Morten Viga will then present Elkem's first quarter results in more detail. We will open for Q&A after Helge and Martin's presentations. So with that, I give the word to CEO Helge Olsen.

Thank you, Odbjerg, and good morning, everyone. Welcome. Yeah, we are expecting to close the sale of the silicones division to Blue Star today, the 30th of April. This transformation will move Elkem towards a more pure play, Metals and Materials Company. Another goal and motivation behind this is to sharpen our strategic focus, tighten capital allocation and improve earnings quality. We're also using this opportunity to streamline the organization and cut costs. And following the transaction we plan to raise new equity of 1.5 billion NOC to a completely announced book building process, and of course in order then to strengthen the balance sheet. And this equity offering is guaranteed, as previously communicated. In addition, we have secured an offer from our relationship banks for a fully underwritten debt refinancing of 1 billion euros. The operational performance in the quarter was hampered by challenging market conditions. Visibility is quite limited, we have to say that, due to changing trade regulations and all the geopolitical uncertainty ongoing. Silicon products presented a weak result in the first quarter, mainly impacted by production curtailments at several brands in Norway. but primarily affecting the Rana and Salton sites. These stops had an estimated EBTA negative impact of approximately 250 million for the quarter. Carbon Solutions was also impacted by negative sales mix with lower share of specialties and negative impact from currency due to a weaker U.S. dollar. In addition, the division was impacted by lower sales internally to the silicon products division. So the EBITDA for the first quarter ended at 249 million NOK, which gave an EBITDA margin of 6% for the company. These numbers do then not include silicones, and we have focused now on Elkem's continuing business throughout this presentation today. So before we go into more detail on markets and results, I'd like to say a few words about ESG. The safety numbers on the right-hand side of the slide here are now excluding the silicones division. Total injury rate is higher than what we have previously announced, but the graph shows a positive development reflecting our extensive focus on health and safety measures, which is a focus we've had over many, many years. When it comes to environmental issues, the sale of the silicones division will further improve Elkem's carbon footprint due to a significantly reduced operational footprint in China, where the energy mix is quite different from Norway. We do, however, continue our efforts to reduce fossil CO2 emissions. And part of this work, we have recently been granted 87 million NOK from Innova. And this is to test and scale up the use of biocarbon in the silicon and ferro-silicon production facilities in Norway. In April, we signed a five-year offtake agreement for biocarbon from Chartek. It's part of the announced sale of the biocarbon pellet pilot production facility that we have been working on in Canada. We will update our climate strategy after the closing of the silicon transaction, and the plan is to present this at the capital market update. We haven't set the date yet, but it will be in the third quarter. And as you can see to the right, we continue to have strong ratings from CDP and Ecovavis, as you know, two well-known leading ESG rating agencies. Yeah, the sale of the silicon solution has developed according to plan and is expected to close today. I got the last message very early this morning that now everything is in place and the paper is on the way to Brno soon. The transaction was approved by the minority shareholders on the EGM on March 9th and Elkem has obtained approval from the necessary majority of its lenders. The credit and notice period expired on April 23rd and Elkem obtained the last regulatory filing approval in France this week. The sale of the silicones division comprised all assets excluding three sites, Yongdeng, the silicon metal, idle silicon metal plant in China, Rousseau, the upstream siloxane production in France, and the smaller downstream facility in India. So we will continue to evaluate strategic options for these plants together with the new board of directors. Rousseau, the French operation, has entered into a five-year supply agreement with Brewstar. We've also secured additional uptake in the U.S. So this will ensure stable operations and we will gradually ramp this up to capacity. We're also talking to other potential partners. customers for products from this site. So I think this will turn out to be a good solution. We will also increase capacity utilization, as I mentioned. The Yongdeng plant in China, which produces silicon metal, was idle in 2025. We are currently in the sales process of this site. India, which is a much smaller facility, it's located just outside Mumbai. This was not included due to a very extensive regulatory approval process in India, difficult for Chinese companies, especially state-owned entities to do anything in India. And we will then take care of this and divest this facility in due course. I don't think that's going to represent any major problem. The sale of the Silicon's division as now well known will be settled through a share redemption of all of Bluestar's shares in Edcam. Following that, we will conduct a 1.5 billion equity offering. This will be done through a publicly announced book building process. In order to strengthen the balance sheet, and as we also previously announced, the offering is guaranteed by a consortium consisting of Folketryg Båne, Must Invest, BNB Asset Management, Nordea Investment Management, and Perestroika. There are plans for subsequent repair offering of up to 300 million NOK, which will provide shareholders the opportunity to subscribe for new shares at the same subscription price. Elkins Board will be responsible for the allocation of the new shares. And of course we have not had a chance to sit down with the new board and talk about this. can assume that the board will adhere to common market practices, which secure the interest of all shareholders. And in that, without going into too many details, current ownership will clearly be a key allocation criteria. In addition to the equity offering, we have been working on the refinancing of our bank facilities. And as I mentioned initially, we have secured a fully underwritten offer for refinancing of €1 billion from key relationship banks. This financing is also subject to final approval from the new board of directors. In March, Scope resolved Elkhorn's rating status and affirmed an issue rating of BBB- and assigned a negative outlook. Elkem is committed to maintain its investment grade rating and will sustain robust financial metrics by further costs and debt reductions. We'll get back to that. We are also reorganizing the company following the sale of the silicones division into three new divisions, Elkem Silicon, Elkem Tarnry Alloys, and Elkem Carbon. And this has been done in order to improve the transparency around the key value drivers in a company. Financial reporting based on this new structure will begin from the third quarter this year. And we plan to present these new divisions and their management in a planned capital market update then after the third quarter presentation, I assume. In the second quarter we will conduct a review of our asset portfolio with the new board and as part of this process we're going to assess some options, strategic options for our Iceland operation. This is necessary due to very weak profitability and negative EBITDA at Iceland since the fourth quarter of 2024. with some structural challenges at Iceland, which I'm sure we'll talk more about later. But that will be a key topic now quite soon. After closing of the silicones transaction, Blue Star's representatives on the board of directors and on the nomination committee will resign, and then with immediate effect. The nomination committee has proposed new shareholder-elected board members to the annual general meeting, which will take place just after this presentation. I have been proposed as the chairman of the new Elkhem board of directors, but will obviously then continue to serve as CEO until a successor has been appointed and is in place. The other board members the nomination committee have proposed are Marianne Elisabeth Jonsson. She has been on the Elkhem board since 2019. She's actually the only one continuing from the old board of directors. Then we have Christian Must, co-owner and director of Must Invest, one of our largest shareholders. Astrid Margrethe Hilde, she's the chief legal and community relation responsible in Glitvenet. And Richard Olav Å, now serving as CFO at Per Olsen and Company. Following the reorganization of the corporate structure, we have also appointed the new senior vice president. So we have Luis Simao, previously running the carbon division, is now appointed SVP for Elkem Silicon. Then we have Elken Foundry Alloys, which will be led by Senior Vice President Inge Gruben-Somnes. And then we have promoted the SIS Entringer, also Brazilian, to the role as Senior Vice President of Elken Carbon. And this team will be physically located here in Oslo. The SVPs will be presenting their respective visions on the announced, on the capital markets update that I mentioned previously. We are also, as I alluded to, implementing a significant cost reduction program. It's developed, it's developing according to plan, I have to say that. We have spent some time on the planning that started a kickoff a couple of months ago on this program. The estimated cost reductions amount to 600 million. Approximately half of this will be realized by the year end of 2026. And an important part of this is the right sizing of the organization and the global workforce will be reduced by approximately 300 full-time employees. And this then represents about a 10% reduction of the remaining organization after the sale of the silicones division. In addition, we are targeting working capital and capital expenditure improvements, totaling 1.3 billion NOK. And the inventory reductions already completed amounted to approximately 500 million. which is linked to the production curtailment I mentioned earlier in the presentation. Investments will be kept, reinvestments will be kept at the maximum of 1 billion for the year. And this program is well underway. We have total investments of around 100 million during the first quarter. So we'll make provision for the cost reduction program in the second quarter and we'll come back with details on that when we report the second quarter in July. Then let's move on to market, the market update and the outlook. It continues, I would say, to be marked by high uncertainty, low visibility. And in addition to regulatory issues, We have regulatory issues that could have significant impact on prices and market development for our products. Recently, the Middle East conflict dominated the news. This has limited direct impact on our business, but higher transportation and energy costs will likely impact sales prices in the EU. So this could have a positive effect, definitely, short term. But of course this may very well be countered by lower economic activity overall. Implementation of safeguard measures for Sparrow Silicon and Farnbury Alloys in the EU has had limited price impact in the first quarter. We think this is due to combination of weak demand and quite significant stock building that took place ahead of the safeguard implementation. Prices for ferro-silicon are expected to increase once stock levels normalize. The production at Rama and Salton was stopped during the first quarter and partly restarted in late March, and both plants are now back into production from the end of April. A positive factor for Elken is that we are eligible for 1.5 million CO2 quotas for the period 2021 to 2025, after the Ministry of Climate and Environment have approved our complaint case. So following this decision, we have not purchased quotas in 2025. Adjusted for this, the net value of excess quotas amounts to approximately 1 billion NOK. and we expect to receive these quotas in 2026. We have a constructive dialogue with the authorities on this matter, but I have to say that we do think this is taking far too long. To conclude, silicon metal was not included in the safeguard measures in the EU when ferro-silicon measures were introduced. The silicon market in the EU clearly suffers from low-priced imports, particularly from China. Protective measures are being assessed. We know that. In any case, if it's decided, it will take time and we will come back to it as soon as we have more information on potential measures. On steel, a new safeguard regime will be implemented from 1st of July in the EU, which will limit imports into the EU of as a maximum 18 million tons. The total consumption in the EU is around 150 million tons per year, and the import last year was 49 million tons. Any imports above this level will be taxed with a duty of 50%. So this is expected to increase steel production and capacity utilization in the EU, which again we think will have a positive impact on the demand for Alchem's products, namely ferrosilicon, foundry alloys, and also electrode paste. So moving on to the key market trends and indicators, automotive, as we talked about many times, is an important sector for Elkem, driving demand for many of our products. Silicon metal is an essential ingredient in electronics, batteries, lightweight materials. The automotive production in Europe has declined, and the outlook remains weak due to demand and significant import pressure from China. A new minimum price mechanism on EVs imported into the EU to offer some protection. Construction is another key market for us, and silicon-based products go into high-performance concrete, into building materials, into infrastructure. Europe is seeing some signs of a gradual recovery. Performance varies significantly across countries and segments. U.S. industrial activity is also relatively soft with the growth in sectors such as data centers, power infrastructure and also institutional driven projects. PMI numbers are normally a good indicator and for the economic sentiment and globally the PMI indices are showing a mixed but at least stable picture. Manufacturing remains soft, but we do see signs of this downturn. Now it's starting to ease, and we see some mild expansion in the U.S. Picture in Europe is mixed, and the German economy continues to contract. It remains to be seen, then, how this Middle East situation will impact markets longer term. Let's take a closer look at specific markets for Elkem and start with silicon. The markets are still challenging with continued price pressure. Silicon reference prices in the EU have declined in the first quarter and were influenced by continued weak demand and low import prices. And it's quite remarkable when you look at the difference of price now in the U.S. and the European markets. In the U.S., prices increased slightly in the first quarter. mainly due to imposed tariff imports. So I don't think I have ever seen prices in the U.S. being double the level of Europe. In China, silicon prices remained low, hampered by weak demand and significant overcapacity, also resulting in some stock buildup. The ferro-silicon markets have many of the same underlying drivers as silicon. Markets are characterized by, also here, by weak demand. The new safeguard regime for steel in the EU is expected to increase production and have a positive impact on the ferro-alloys in general. Ferro-silicon prices in the EU have increased moderately after the implementation of safeguard measures. But as mentioned, the impact so far has been quite modest due to stock buildup prior to the implementation and which we think is still ongoing to normalize. In the U.S., our silicon prices are impacted by tariff structures and the demand is showing a positive development and further improvement in market conditions are expected there. The market for carbon products is similar. Oh, sorry. The market for carbon products is much smaller than the silicon and ferro-silicon. We don't have reference prices here, but demand differs a lot by region, and it's influenced by steel, ferro-alloys, and aluminum industries. Global crude steel production declined by 4% in the first quarter this year compared with last year. primarily driven by lower activity in China, where output decreased by 7%. The European production decreased by 4%, while North American production was on a stable level. Steel and ferroalloy markets continue to face challenges. However, carbon solutions, specialized product offering, and also our wide geographic presence will provide resilience and stability in earnings. And as mentioned, the new safeguard framework for steel in the EU is expected to support higher steel production and could definitely positively impact the markets for carbon solutions. Then moving on to the outlook for the second quarter, the conflict in the Middle East along with trade regulations and protective measures is expected to keep impacting Elkhorn's markets. and leading to continued uncertainty. However, Alchem is well positioned due to our diversified geographic presence and also strong market and cost positions. Silicon products is still experiencing difficult market conditions, but the results are expected to improve gradually as production now returns to full capacity utilization. However, there will be an impact of costs related to restarting production and the ramping then up to full capacity. Carbon solution anticipates generally stable financial performance in the second quarter compared to the first quarter. So I think with this, I'll give the word to you, Morten, to take us through the financials.

Thank you very much, Sergey, and good morning, everybody. So let's start with the overall numbers, and these numbers are excluding Elkim silicones, where we expect to have the closing of the divestment later today. Elkim's operating income for the remaining business, amounted to 4 billion NOC for the quarter, which is down 7% compared to the first quarter last year. And the reduction was applicable both for silicon products and carbon solutions. LKM's EBITDA for the first quarter amounted to 249 million NOC, and this was a reduction by 65% from the first quarter last year. The EBTA was significantly impacted by the production stops at El Camerona and El Consulting, which was estimated to have a negative impact of 250 million NOC minus for the quarter. And this resulted in an EBTA margin of 6% for the quarter. As usual, we have provided an overview of some of the main financial numbers and ratios. I will not go through all of them. And as closing of the silicones transaction is expected today, we are focused on LPM's figures for the quarter and what the key ratios will be for our continuing operations without silicones. As I said, the EBITDA amounted to 249 million NOC, where there was realized derivative effects in segment other of only 1 million NOC in the quarter. Other items amounted to 18 million NOC, and this consists of gains on power and currency derivatives of 40 million NOC, currency losses of 24 million NOC, and other items The net finance income was 366 million NOK. This consisted of net interest expenses of minus 102 million NOK, currency gains of plus 471 million NOK and this is due to a significantly stronger NOK which is the functional currency versus where we have the majority part of our loans. And net other financial items amounted to minus 3 million. The income tax was minus 63 million, giving a tax rate of 36% for the quarter. Let's then take a look at the divisions and start with silicon products. The silicon and ferro-silicon markets remain difficult. and the results were significantly impacted by the reduced production at several plants, particularly Salton and Rana, where we had a full production stop during a part of the quarter. Total operating income amounted to $3.3 billion, and this was a reduction of 5% compared to the first quarter last year. The reduction in operating income was mainly due to lower sales prices for silicon, but this is partly countered by higher sales volume compared to the corresponding quarter last year. The EBPA was 122 million up, which was down 75% compared to the first quarter last year. And this reduction is primarily driven by the full and partly production stops at several plants. including Rana and Salton, but also at other plants in Norway, we had production retainments for longer or shorter periods. And as I said, the production stop had a negative EBTA effect of approximately 250 million nok in the quarter. Lower sales prices this quarter also impacted the EBITDA compared to last year's EBITDA. Sales volume, however, was 14% higher this quarter compared to last year, and sales volumes were higher across all product lines as we have focused a lot to increase sales in order to take down inventory and to reduce working capital. The carbon solutions division presented a relatively weak quarter, but still generated an EVTA margin of 23%. The first quarter was affected by negative sales mix, particularly lower share of specialty products. Total operating income amounted to $722 million, which was 16% down compared to the first quarter last year. And the EBTA amounted to $165 million, which is a reduction of 37% from the first quarter last year. In addition to the negative sales mix effects, the operating income and EBITDA were also impacted by currency effects. The weakening of the U.S. dollar versus the NOC and Brazilian reais has had a negative impact on the results. And the production retainments in silicon products, which represent a major factor customer base for carbon solutions also had a negative effect for the carbon solution results. We also experienced low demand in South America due to trade restrictions into the U.S. Saves volumes were stable compared to the first quarter of last year. But market conditions remain challenging due to continued idle capacity and low demand from the federal alloys industries. So let's then take a look at some of Elkem's key financial ratios. The EPS amounted to 0.56 not per share for the first quarter of 2026. And this number is calculated excluding Blue Star shares, which will be redeemed in connection with the closing of the silicones transaction later today. Having said that, we should also remind you that the number of shares will increase in connection with the equity offerings later in May. Total equity for Altium adjusted for the sale of the silicones division amounted to $11.6 billion. as per the end of the quarter, and this gives an equity ratio of 42%. Now, if you adjust for the new equity offering of 1.5 billion NOK and the planned repair offering of 0.3 billion NOK, the pro forma equity ratio would be 46%. And this clearly means that the balance sheet remains solid also after the silicones transaction and the reduction of the Blue Star shares. By the end of the quarter, Elkem had net interest bearing debt of 9.3 billion NOK, and this gives a leverage ratio of 5 based on the last 12 months EBTA of 1.9 billion NOK. Adjusted for the already underwritten equity offering of 1.5 billion NOK and the planned repair offering estimated to 300 million NOK, the Performa net interest bearing debt It was $7.5 billion, and this then represents a leverage of four times EBITDA. Leverage is respected to be further reduced going forward by working capital improvements and effects of the cost reduction program, which will kick in from Q3 and onwards. And we're also targeting a well-distributed maturity profile. And as Helge said, we have got an offer for a favorable refinancing package where there will be a refinancing of 1 billion euro. and we have secured a fully underwritten offer from four of our main relationship banks. The interest cover ratio amounts to six by the end of early quarter 2026. As I said, it's a key priority to reduce working capital and also have a very disciplined portfolio. program on CapEx in order to reduce debt and improve cash flow generation going forward. So cash flow operations was 169 million in the first quarter, and this was an improvement from the corresponding quarters despite lower EBITDA. We have during the quarter reduced inventories by approximately 500 million NOC due to higher sales and lower production. And this reduction will then be converted into lower working capital and freight of cash during the next quarter. The investments were very moderate and amounted only to 122 million NOC in the first quarter. where reinvestments amount to 111 million NOC, and strategic investments are basically at zero or 11 million NOC. The reinvestments amount to 44% of depreciation and amortization. And this clearly is an indication that our program, our commitment to cap investments at maximum 1 billion NOC is progressing well, and we will definitely deliver also on that target. So, we have not included silicones numbers in the previous slides, but of course, we still are the owner of silicones until closing later today. So, this is a slide summarizing the silicones performance in Q1. As you know, the division has been classified in the accounts as assets held for sale and discontinued operations. Overall, the division reported improved results compared to the corresponding quarter last year, mainly due to cost improvements. Total operating income was down 4% from Q1 2025, mainly driven by stronger NOC versus main business currencies. EBITDA, however, was up 85% from Q1 2025, maybe mainly explained by lower raw material costs, higher sales volumes, and other internal cost improvements. Sales volume was up 10% from Q1 2025, driven by higher sales of commodities and specialty products in main regions. EMC prices in China were stable in Q1, and there clearly is an effective problem to curb overproduction in China. Anti-involutions, similar anti-involution measures are underway in a number of sectors in China. And the measures from silicon producers have so far been effective at curbing overproduction and increasing sales prices, defies weak underlying demand. So let me wrap up this presentation by summarizing the main headlines and takeaway for the quarter. First of all, we are streamlining the organization and implementing targeted cost measures to support a more focused business model. And the target is clearly to improve Elgin's profitability in a very challenging market situation. And, of course, when market sentiment is improving, we will still have a great benefit for improving our cost position. We're also clearly implementing measures to strengthen the balance sheet, and we will conduct a guaranteed $1.5 billion equity offering and plan a subsequent repair offering after closing of the silicones front section. And as I said, in addition, we have secured a refinancing of bank facilities of 1 billion euro, 11 billion NOC, and this refinancing is underwritten by four main relationship banks. So, following the guaranteed equity rates and the guaranteed refinancing, Elkim's financing position is considered to be very robust. The first quarter was clearly weak. but the profitability is expected to improve in the second quarter as production gradually returns to full capacity. So far, we have not experienced any tailwind from improved market conditions. Trade regulations and protective measures are likely to continue affecting LGS markets, and we expect that market conditions will gradually improve. We believe that we continue to be very well positioned due to strong market and cost positions when the markets improve. So let me finish up there and hand the word back to Olga who will then chair the Q&A session. Thank you for that. We will then open for Q&A and like to start with the people here in the audience and see if there are any questions, and I expected that to be among those, so please.

Yeah, no microphone.

No, not needed.

Yeah, so just wanted to touch on the silicon product figures, because the volumes were very high, despite some production cutbacks. Can you say a bit about the dynamic there? Are you back to normal or the desired levels in terms of tons of inventory, and Is the quarter negatively impacted by you having to sell at a discount or something to get that much volume in a relatively weak market?

Yeah, you can probably add more, but I think definitely we see some positive signs on demand output, and otherwise we could not have restarted production. So I think the underlying sentiment is good in terms of sales. And you're right, it did pick up during the quarter. On inventory reduction, we can probably do more. We'll always have an attention to that, but what we intended with this curtailment has been achieved.

Yeah, I think the answer is yes to your questions. Our sales volume was high in Q1, but we had to sell deliberately also in marginal markets at low prices, in markets that we usually do not sell big quantities into, but we did that in order to reduce inventories So, obviously, the EBITDA impact from that was not great, but we will reduce inventories and working capital, and that was needed. Clearly, we also had a negative profitability impact from the sale of surplus power as we closed down the plants in Northern Norway and Rana. In Salton, we had a major amount of surplus electric power that needs to be sold in the market. At the beginning of the quarter, spot prices were quite high, but due to heavy precipitation, the power prices had a drastic decline, so we also had a loss on that impacting the quarter. So going forward, I think the important thing is that we have now laid a basis for a significant reduction in inventories that will then cause a significant reduction in working time.

Can you sort of quantify if you had normal production and you didn't have to sell those extra volumes in soft markets, like roughly how much higher it would be?

No, I think the number that we have... an ounce of 250 milliliter that represents the difference versus normal run rate given current market conditions.

And another question as well on the CO2 quotas that you are going to hopefully soon receive. Can you say a bit about what's the holdup? I mean it's been almost a year. Since it seemed like the worst, it was sort of a dumb deal that you were getting these quotas, and is there any risk at all that it could be... It has been confirmed in writing that we have support for our complaint.

This is the second round. By the time we do this, we also have a similar process in the round of allocation. So why the Norwegian government keeps creating problems like this, it's hard for us to say. I cannot give any answer on bureaucratic processes. That takes much time. No reason to believe that we should not get this.

There is also a formal, let's say, notification process with EU on such matters, and that's probably also a bit time consuming. Helge is absolutely right. We have it in writing that we will get those quotas.

And then finally, from me, it seems like you are sort of looking to potentially sell some of these units that you are left with in silicones and also sort of looking into the Iceland units. Can you... I don't know if you can give any indication of what you can be looking at in terms of sales prices or how much they are worth, or at least how much book value is tied up in this unit, so we can have some sort of idea on the knowledge.

I think it's very hard to start guessing on the value in actual transactions. I don't want to do that.

But you know, I guess, what you have in our policy.

I think we would like to, of course, first of all, initiate a discussion with the new board to be elected later today. And I'm sure we will address these issues during Q2. I think it's a bit premature to start addressing this right now. But we are very open about the fact that there are, of course, three silicones assets where we have plants. And we're also quite open about the fact that we have a challenge in Iceland that we will solve and we are pursuing, let's say, federal options. Thank you. Okay, thank you very much. Other questions from the audience here before we go to questions on the web? If not, there are also some questions here on the web. And one question is regarding sales that you touched upon also. With regards to what we're seeing now in the second quarter and the potential to reduce inventories further, is it fair to say that selling at lower prices could continue into the second quarter, like in the first quarter?

No, that's not the intention. Very short and clear.

The question is also, could you provide some more color regarding the cost in the second quarter, restating the facilities, Rana and Salten in particular? No, there will always be some starter costs when you restart furnaces, not big amounts, but we have then fully restarted both Salton and Rana in April. So although capacity utilization will be higher in Q2 versus Q1, and as such, the profitability of these plants will be significantly better. We will not have a normal capacity utilization, so there is a potential for a further increase in the three and onwards. There is a question also about Iceland that was mentioned in the presentation that we looked at our asset portfolio, and the question is if you could elaborate on the structural challenges in Iceland.

I think Iceland has one competitive advantage. That's hydropower. renewable power. Other costs are historically on a higher level than what we see in Norway, for instance, compared with Norway, and I think that has become even more difficult, combined with safeguard measures and especially as a very strong Icelandic currency have So we need to look at all potential or all possible options for the future of Iceland. I don't think it's right to speculate on what they are right now, but obviously an important topic with a new board and we'll be, we will definitely elaborate more on that in the second quarter presentation. You mentioned Safeguard, and Safeguard has been implemented for ferro-silicon.

Why hasn't the prices moved up further?

I think the obviously low demand is still there, but the stocking that's been going on is the main explanation for that. We do expect something, some improvement in price levels. And there are also some positive signs from steel in general which I think can support ferro-silicon in general. And with Safeguard on ferro-silicon and steel being implemented, do we see similar measures for silicon metal going forward? I think that's a more controversial issue in the EU to look at the exposure of different consumers. I know that has been discussed for quite some time, but there doesn't seem to be any, say, consensus around how and when to implement such measures. But definitely needed. But there is anti-dumping on silicon from China, but it's not enough to protect the EU-based players. So it's a consequence of very little capacity utilization. is taking place in the EU right now. Yeah.

Then there is a question about the refinancing package, and if you can say anything about the terms and conditions. Well, first of all, we're very happy to have this refinancing package in place. We clearly believe it's a very good package. But it's up to the new board to finally approve it, and the board will be elected later today. So let's have the approval, and then we will disclose more details on the package. And then the last question here before we wrap up, if you can see any further working capital release in the second quarter as compared to first quarter? Definitely. We have made a commitment. We will take down working capital by one billion up during the year. I think a major part of that will be realized already during Q2. We have already laid a good foundation with the reduction in inventories. There will probably be even more reduction in inventories. And then we're working on other measures, also on credit terms, which in total should exceed the working capital reduction to more than $1 billion for the year. And then the major part already included. Very good. That was the last question, and that concludes our presentation today. So I would like to thank people in the audience for attending and also those on the webcast following us here. Thank you very much, and have a nice day.