Current Trading Overview:
- • H1 2025 revenue $996.8 mm vs $608.0 mm H1 2024; gross profit $220.7 mm vs $221.4 mm; gross margin compressed to 22.1% from 36.4% on weaker pricing and higher transportation and energy in mix, partly offset by cost actions. EBITDA reported $291.7 mm vs $209.2 mm, helped by lower fixed costs and US acquisition effects, but includes non-core gains.
- • Clean EBITDA (definition and logic): start with reported EBITDA $291.7 mm; subtract other operating income that is not core cash (FX and ancillary income $34.1 mm plus rent/discount income $1.2 mm); add back disclosed acquisition-related costs $9.7 mm that are one-off. Clean EBITDA = $291.7 mm − $35.3 mm + $9.7 mm = $266.1 mm for H1 2025. Reported EBITDA (unadjusted) remains $291.7 mm.
- • Out/underperformance vs guidance: management guided Adj. EBITDA/mt ~$105 in Restricted Group through H1 and achieved ~$105; netback margins modestly improved Q2 qoq but remain below prior year.
Segmental performance:
- • H1 2025 revenue split: Türkiye $496.4 mm (Eti/Kazan), WE Soda West (US) $361.0 mm from 1 Mar–30 Jun contribution, Corporate/other $86.9 mm. Net loss concentrated in Corporate and US integration period. [Segment note]
- • EBITDA uplift driven by lower cash costs in Türkiye; pricing a headwind; US assets added volume but had integration and fair value impacts.
Leverage (TNL) trend:
- • Total net debt per consolidated FS $2.638 bn at 30 Jun 2025 (includes borrowings and leases; cash $196.4 mm). Consolidated net leverage reported 3.2x at 30 Jun; our Clean TNL/EBITDA (annualising H1 Clean) ≈ $2.638 bn / $532.2 mm = ~5.0x, highlighting reliance on adjustments/proforma. Lease liabilities are material ($194.6 mm non-current; $29.6 mm current).
Cash flow and FCF:
- • H1 2025 CFO $498.4 mm vs $141.5 mm H1 2024, aided by $212.4 mm payables inflow and derivative cash inflows. H1 2025 FCF (CFO − capex) $419.5 mm; excluding M&A, investing outflow was dominated by $1.027 bn Alkali purchase. Q2 2025 Restricted Group FCF $88 mm, +69% yoy.
Liquidity and quarterly cash burn:
- • Cash $196.4 mm; management cites overall financial liquidity >$400 mm (cash plus undrawn lines). Net change in cash H1 2025 −$55.1 mm, entirely driven by acquisition outflow despite strong CFO.
Corporate actions / news:
- • Acquired Genesis Alkali on 28 Feb 2025 for $1.04 bn (cash), funded by equity, US TLA $420 mm, ORRI bonds continuation, bridge/RCF; integration ongoing with synergy claims. Signed SPA to acquire Iberian distributor stake (12 Jun 2025). Ongoing Solvay patent litigation; Dutch judgment expected 25 Oct 2025. Executed $500 mm cross-currency swaps and interest rate hedges.
Guidance:
- • FY 2025 Restricted Group: sales ~5.1 mt; Adj. EBITDA ~$525 mm; Adj. EBITDA/mt ~$103; YE net leverage ~3.0x. Proforma Consolidated: sales ~9.4 mt; Adj. EBITDA ~$700 mm; EBITDA/mt $75; FCF ~$500 mm; YE net leverage 3.2x. Key risks: soda ash pricing/demand softness, EUR/USD volatility, US integration delivery, litigation outcome, covenant headroom in US TLA/ORRI, and Turkey macro.
Indicative rating view:
- • Using Clean EBITDA $532.2 mm annualised and TNL $2.638 bn, Debt/EBITDA ~5.0x, consistent with B1/B+ on leverage grid; interest burden remains heavy with finance expense $211.7 mm in H1. On this basis we would place at B1 (B+) pending sustained deleveraging to ≤3.5x and clearer pricing recovery.
Conclusion:
- • Strong H1 CFO and FCF and scale added in the US, but quality of earnings is flattered by adjustments, leverage is elevated on a clean basis, margins compressed, and execution and market risks remain non-trivial.