Good day, ladies and gentlemen. And welcome to the Ferroglobe’s Second Quarter of Calendar Year 2017 Conference Call. At this time, all participants are in a listen-only-mode. Later, we will conduct a question-and-answer session and instructions will follow at that time [Operator Instructions]. I would now like to turn the call over to Joe Ragan, Chief Financial Officer. Please go ahead.

Good morning. And thank you for joining the Ferroglobe second quarter of calendar year 2017 conference call. I’m going to read a brief statement and then hand the call over to Pedro Larrea. Statements made by management during this conference call that are forward-looking statements are based on current expectations. Risk factors that could cause actual results to differ materially from these forward-looking statements can be found in Ferroglobe’s most recent SEC filings and the exhibits to those filings, which are available on our webpage, www.ferroglobe.com. In addition, this discussion includes EBITDA and adjusted EBITDA, and adjusted diluted earnings per share, which are non-IFRS measures. Reconciliations of these non-IFRS measures may be found in our most recent SEC filings. Now, I will turn the call over to Pedro Larrea, our CEO.

Good morning, everyone. And thank you for joining us on the call today. Before we go into the details of the quarter, let me provide some context into the current environment and our strategy as we move through 2017. On slide four, you can see Ferroglobe delivered a strong quarter with results that exceeded expectations; we posted a quarterly net profit, albeit a modest one, for the first time since our merger; and delivered a significant increase in both our earnings and EBITDA margin performance; we delivered an 8% increase in revenues, 42% increase in adjusted EBITDA; and our adjusted EBITDA margin improved to 250 basis points at 10.3% for the second quarter compared to 7.8% for the first quarter of 2017. Our strong performance is driven both by significant improvements in the external environment, as well as actions taken by Ferroglobe during the past period. In the external environment, and mainly for silicon metal, we witnessed a significantly reduced inflow of low price imports, as we are starting to see the impact of the ongoing trade cases. In silicon-based and manganese-based alloys, we continued to see a strengthening of demand across end markets, and improved supply demand balance in the different geographies. Combined, these trends have resulted in a sustained price recovery and continued stabilization of shipments and volumes; although, with different pace and timing depending on products and geographies. At the same time, actions taken this quarter and in prior quarters, I’m sure, we were able to fully capture the benefits of these trends; our commercial strategy then to enhance our profitability. In addition to general price recovery, we continued to focus on delivering contracts above spot and index prices. This strategy has been performing well for us, and together with the market recovery, has allowed for the…

Thank you, Pedro. Next slide. Sales volume was [218,197] metric tons for the second quarter, up 1.6% from the first quarter. And net sales were $428.8 million, an 8% increase compared to the first quarter. Average selling price across all products was $0.79 per pound, up from $0.74 per pound in the first quarter, an increase of 6.8%. We posted a net profit of $1 million or a gain of $0.02 per share on a fully diluted basis. On an adjusted basis, our net profit attributable to the parent was $6 million or $0.05 per share on a fully diluted basis. We reported EBITDA of $36.8 million for the second quarter, up from $30.9 million in the prior quarter. On an adjusted basis, EBITDA was $43.9 million, up 42% from the first quarter of 2017. During the quarter, we continued to adhere to our strategy of realizing prices of the index, which coupled with a continued strengthening of demand and improved volumes, resulted in 10.3% EBITDA margin compared to 7.8% margin for the first quarter of 2017. Total working capital was $388 million and free cash flow was $5.8 million. Next slide. We ended the second quarter with net debt of $435 million slightly up compared to $407 million at the end of the first quarter of 2017. Next slide. On this slide, you’ll see our debt evolution overtime. On a quarterly basis, net debt was up slightly from the prior quarter and currently stands at $435 million net and $618 million gross for the second quarter. We remained committed to reducing our nominal debt balance, as well as improving our leverage on a go-forward basis. Next slide. We remain focused on carefully managing our cost structure and ensuring strict control on our operations. If you can see, we ended the second quarter with working capital of $388 million. Now, I’ll turn the call back to Pedro for some closing remarks.

Thanks, Joe. In closing, Ferroglobe is capitalizing on its strong market position as we deliver quarter-over-quarter growth and improved profitability. We have taken decisive action to manage our cost structure, identify markets and products that were experiencing and improve demand and pricing environment, and executed our commercial strategy. And we are now experiencing sustained benefits across our key products. Additionally, our diversification strategy has positioned us to maximize exposure to improved prices and ensure a more balanced business mix. We expect prices to continue to improve for the year, and we remain focused on sustained performance across our business as we move into the second half of 2017. We are pleased with the trend of our business, but we remain committed to improving profitability in the short and medium-term to return our financial performance to where we all expected to be. With that, I’d like to open the call up for questions.

[Operator Instructions] Our first question is from Martin Englert with Jefferies. Your line is now open.

Do you have an estimate of the EBITDA impact for 2Q from the furnace conversion in Spain, as well as the Bridgeport operational issues?

I don’t have the exact number. But it is not very significant, but it could be. I really don’t have an exact number for that.

And so far we see continued improvement in spot prices for silicon and alloys, but also some shifts in FX. Can you talk generally what you’re expecting as far as incremental EBITDA as we look into the second half of this year versus where we’re at in 2Q?

I can talk you about the relative impact of the pricing increases versus FX. We’re really not going to talk about the rest of the year, because I’m not sure what the foreign currency forecast will be. But I call tell you that out of the 6% that we reported, 6% to 7% reported in price increase. About a third of that was FX related. So we saw real price improvements on a normalized basis, excluding the FX. But there was some benefit about a third of it, was FX. That is total Ferroglobe.

And in terms of the factors going forward for the rest of the year. I think, well, each one could have its own expectations in terms of price evolution, both ferrosilicon and manganese alloys are at historically high levels; although, in the past few weeks, they look to be strengthening. But one could say that prices, going forward, could remain at those levels. In the case of silicon metal, you have witnessed what the evolution is being. And the question is that in silicon metal, around 50% of our business is one way or another indexed, the rest is with fixed prices. So we will be benefiting in Q3 and Q4 of the increased silicon metal prices for about half of our volume. And in terms of volumes, going forward, I think we have mentioned that we are now -- we have stabilized our volumes. I think there could be additional volumes in silicon metal in North America as the low price imports, I would say, retreat from this market. So we could see some additional volume in silicon metal. The rest of our products, we’re running at full capacity and we’re fully booked. So I don’t think we can expect significant volume increases in the rest.

And one last one here, just looking at financing expense run-rate, it was around $14 million quarterly in first half and D&A around $27 million. Are these reasonable run-rates on a go forward basis?

We had some higher expenses on the financial expense side. There’ll be a little bit lower by about $2 million on the financial expense. D&A is about right.

Our next question is from Ian Zaffino with Oppenheimer. Your line is now open.

First question would be, and I’ve [shot] things through this, because now you’re an international company. And if you do get these antidumping duties, I guess originally, when you were [drastic] only that would be really a win-win situation. But now, you’re international. Does that mean if you get the antidumping duties in the U.S., will the European prices go down? And if they do go down, I mean, do you have the ability to then maybe ship your products from Europe into the U.S., and avoid those empty dumping duties. I’m just trying to figure out how the entire company might get impacted with a favorable antidumping ruling, going your way? Thanks.

That’s a very interesting question. The fact is that if we look at input volumes into Europe in this first half of the year, from Brazil for instance. They have actually already been going down. The fact is some of the, I would say, some of the importing countries are just becoming non-competitive because of factors that affect their own cost to structure. So I think what we’re seeing in this market is something we were expecting at the end of the day, which is a lot of people just losing money at the price levels we had last year. And as we were also arguing of course, they were just dumping by selling below their own cost and reasonable prices. So, the upward trend on prices is something we were expecting, and it’s just now the cost competitiveness of each player that will allow them to compete in each market. So I don’t think, and then we see what is happening now in China as well. We are, today, not -- and I don’t think that our business is threatened by additional low price imports in Europe. We don’t see that happening right now. It is also proven at the end of the day, because we have several production platforms. We will decide how much we produce in each country and where we ship it, and we will optimize, I would say, market prices and the production cost across all our platforms. But right now, again we are seeing very positive momentum, both in Europe and North America in terms of prices and we are conducting our business accordingly.

And then I guess another question, maybe this is more for Joe. Joe, can you give us an idea of maybe what the run-rate EBITDA truly is at these price levels, because it’s a little hard to figure out, which contracts are being priced at which price, whether it’s a pretty much beginning of the year. So as you think through, what is the run rate EBITDA that you’re doing right now if all your contracts were to reset today? Thanks.

I appreciate the hard question. The current run rate EBITDA, is where we are today, will be consistent for the rest of the year. So I want to make sure that everyone understands. Although, the pricing levels have increased the indexes, industries have increased. And most of our production is contracted, some of it indexed, some of its not, some of its fixed. So our performance for the rest of the year will be slightly better than the Q2 results. But the real change in results happens in 2018. And the delta on a blended rate is probably $0.10 to $0.15 from globally.

Across all our products…

And we know that, let's just say, on $0.10 improvements that it's $15 million for every improvement across all the products. So without any further price appreciation that would increase annually a $150 million in EBITDA conservatively at the current pricing levels.

So turning to each of you pretty big year for you guys. I guess with that, what would you do with the cash flow? I know you used pay dividend. I’m not so sure that’s a great idea to resume it. But what is your thoughts on what you would do with that cash flow and how to deploy it?

Certainly, we talk about that a lot, Ian. And I think in the short-term, we have some debt to pay down and we’re going to bring down the leverage, as Pedro said, below 2 times. So that’s what we’ll do in the short-term. And Pedro is looking at many different options from capital allocation, on M&A opportunities, as well as whether to restart the dividend.

And we are a company, and of course we’ve gone through a difficult year in 2016. But we are certainly a company that has an appetite for growth. And I think we have proven that we are successful at identifying opportunistic M&A transactions. And we are -- I think we have mentioned this in different calls. We are, at any point in time, we are analyzing several opportunities for growth and we are very strict in terms of the profitability of such acquisitions and making sure that they are immediately accretive. But right now, we are looking at tangible real growth opportunities of this kind, meaning really accretive value adding opportunities.

[Operator Instructions] Our next question is from Sarkis Sherbetchyan with B. Riley & Company. Your line is now open.

So book of the favorable demand environment allowing you to return to close to full capacity, I would think it was in North America for the most part. And you also restarted one or two furnaces in Selma. Can you maybe talk about your decision to either restart some of the furnaces and/or convert furnaces?

Well, yes. As I was mentioning, yes. And well, in Europe, we are running all our furnaces at full capacity. In North America, after we restarted one furnace in Selma. It’s only really the second furnace in Selma that would remain idle. But if demand evolves as we expect, we will probably even restart the second furnace in the coming weeks; but again, just analyzing the demand for that. So we would be running full capacity in both in Europe and North America. And then I think the only spot where we still have some idle capacity, which is South Africa, we have basically two furnaces out of three that are still stopped in our Polokwane facility. In terms of allocating furnaces to silicon or ferrosilicon, and I think that is really the ones that sometime that we can decide whether we switch from one product to another. It is really a question of relative profitability of each product at a given point in time and also, of course, of the demand out there and our ability to capture market share in each demand. I would say that as we are running right now, we don’t expect further furnaces conversion in the coming weeks.

And will there be something that would cause you to reassess that decision as far as furnace conversion. It sounds like the ferrosilicon market is pretty hot right now, from a pricing perspective. So what are you seeing from a demand perspective that may cause you to either make that decision or not?

Well, again, switching furnaces is possible. It's technically possible. It does take some time. And it’s not all with optimal from a technical point of view. I would say that we still have some idle capacity around the world in South Africa and in even one furnace in Argentina. I would say that if prices and demand keep on going up, as we are seeing right now, we would first restart those furnaces and allocate those furnaces to the right products before switching capacity that, right now, is running at full speed and with wide allocation, I would say, of products and costs. So I would say that in terms of switching, we would be looking more at the furnaces that are still stopped rather than the ones that are currently running.

And I am showing no further questions. I would now like to turn the call back to Pedro Larrea, CEO for any further remarks.

Well, thank you everyone for joining us this morning. And as I was saying, we are pleased with the evolution of the business, but we are also committed to returning our performance to where it should be in the coming quarters. So thank you very much, everybody.

Ladies and gentlemen, thank you for participating in today’s conference. You may all disconnect. Everyone, have a good day.