Moody’s revises Ferroglobe’s outlook to negative, affirms B2 rating

Investing.com -- Moody’s Ratings has affirmed Ferroglobe PLC’s corporate family rating at B2 while changing the outlook to negative from stable, citing ongoing financial pressures and market uncertainties.

The rating action reflects Ferroglobe’s financial struggles during the first half of 2025, with EBITDA turning negative in the first quarter. Despite slight improvements in the second quarter, the company faces continued pricing pressures from cheaper competing products imported into the EU market.

Due to heightened uncertainty and limited visibility into future market conditions, Ferroglobe has withdrawn its performance guidance for 2025. The company’s credit metrics have significantly weakened, with debt/EBITDA rising to 5.8x for the last twelve months ending June 2025 and projected to reach 8.9x by year-end, up from 1.3x in 2024.

Free cash flow is expected to turn negative in 2025, reversing from nearly 50% FCF/debt in 2024.

Adding to the uncertainty is a pending European Commission decision regarding its safeguard investigation into imports of manganese and silicon-based alloying elements. While potential antidumping controls could benefit Ferroglobe, the timing and impact remain unclear.

Despite these challenges, Moody’s notes that Ferroglobe has improved its debt structure since the last downturn. The company’s asset-based lending and local facilities, along with factoring facilities, create a stronger balance sheet without bullet maturities compared to prior years.

Ferroglobe’s liquidity remains adequate with over $100 million in cash and more than $70 million available on its $100 million ABL. The company has no material near-term maturities, though Moody’s expects cash consumption in 2025 due to weakened revenue and significant planned capital expenditures.

The negative outlook reflects uncertainty about market conditions for Ferroglobe’s products in 2026, particularly regarding potential European Commission countervailing duties.

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