Eramet (Euronext Paris: ERA) reported adjusted EBITDA of 276 million euros for the first half of 2026, against 191 million euros a year earlier, in half-year results published on 29 July 2026. Turnover rose 10 percent to 1,545 million euros from 1,404 million euros, and adjusted free cash flow returned to break-even at positive 7 million euros after a negative 266 million euros in the first half of 2025.
The release carried its own condition in its title: execution of the funding plan is described as essential for the group in the second half. That framing is unusual for a results statement reporting a 45 percent rise in operating profitability, and it is the part of the disclosure that governs how the rest is read.
Volumes drove the operating rebound
Two businesses account for most of the improvement. Lithium carbonate production reached 8,440 tonnes of lithium carbonate equivalent over the half, against 710 tonnes in the same period of 2025, as the Centenario direct lithium extraction plant in Argentina reached 90 percent of nameplate capacity in June. Lithium turnover was 136 million euros against 4 million euros a year earlier. Eramet also said detailed studies have been launched on an expansion adding 11 kt-LCE of annual capacity.
Manganese remained the larger business. Turnover for the manganese division was 998 million euros against 949 million euros, up 5 percent, with transported ore volumes in Gabon rising 6 percent on the back of rail improvements. Volumes moved by Setrag, the group’s Gabonese railway subsidiary, rose 9 percent year on year across all users of the line.
Mineral sands moved the other way. Turnover fell 59 percent to 56 million euros from 135 million euros after a fire in Senegal in February, with partial production restarting at the end of April. Insurance indemnities of 50 million euros were recorded, and the group took an impairment of 112 million euros on mineral sands assets following the fire and an update of mineral reserves. That impairment is the main reason net income, group share excluding SLN, was a loss of 146 million euros, a wider loss than in the first half of 2025.
Christel Bories, chair and chief executive, said in the release: “In the first half of 2026, our results reflect concrete progress on all fronts.” The same statement records two fatal accidents at PT WBN in Indonesia during the half, alongside a decline in the accident frequency rate.
The balance sheet is the binding constraint
Net debt stood at 1,868 million euros against 1,935 million euros a year earlier, a decline of 3 percent. Adjusted leverage improved to 4.5 times from 5.5 times, and gearing stood at 129 percent. Net debt excluding SLN was stable at 2 billion euros. Liquidity was 1.3 billion euros, a figure that includes the revolving credit facility of 935 million euros, drawn in full in late January 2026.
The funding plan has three visible components. Capital expenditure was cut 53 percent under the ReSolution programme. A capital increase of up to 500 million euros, approved at the general meeting in May 2026, is scheduled for execution in the fourth quarter of 2026 and is described by the company as remaining essential to the plan. And a loan agreement of 225 million euros was signed with Proparco and IFC for Setrag, including refinancing of 87 million euros of existing debt, with a first drawdown planned for the second half.
For the full year, Eramet confirmed guidance of 6.4 to 6.8 Mt of manganese ore transported at a FOB cash cost of 2.4 to 2.6 dollars per dmtu, lithium carbonate production of 17 to 20 kt-LCE with nameplate capacity close to 100 percent at end-2026, and capital expenditure between 250 and 290 million euros, including 35 million euros for repairs in Senegal. Nickel ore sold externally is limited to 9 Mwmt against an initial RKAB of 12 Mwmt, with an upward revision submitted in early July awaiting Indonesian approval.
Analysis: a recovery measured in volumes, a risk measured in covenants
The operating improvement is volume-led and therefore checkable. Lithium output went from 710 tonnes to 8,440 tonnes, manganese transport rose 6 percent, and cost savings came through the ReSolution programme. None of those depend on a price assumption. That distinguishes this half from a cyclical rebound driven by the manganese ore price, and it is why the EBITDA move is larger in percentage terms than the turnover move.
The balance sheet does not follow the same arithmetic. Leverage of 4.5 times is an improvement on 5.5 times, but net debt fell only 3 percent year on year, and the whole of the group’s revolving credit facility has been drawn since January. Drawing an RCF in full converts a standby line into cash on the balance sheet and removes it as future headroom. Read alongside the reference to a gearing covenant tested in June and December 2026, the sequencing becomes clearer: the capital increase planned for the fourth quarter is the instrument the group states is essential to the funding plan, and it falls in the same year as the two gearing covenant tests.
The Setrag loan illustrates a second point. It is 225 million euros, of which 87 million euros refinances existing debt, so the new money is smaller than the headline. It also sits at the subsidiary that moves manganese ore, which is the same asset whose 6 percent volume growth carried the manganese division this half. Financing the constraint on the group’s largest business is a narrower proposition than financing the group, and it is provided by development finance institutions rather than the bond market the company says it wants to keep accessible.
What the release does not establish is the price of the capital increase or the participation of the group’s reference shareholder. It gives an approved maximum, 500 million euros, an approving vote in May 2026, and a quarter. A careful reader would treat the fourth quarter execution as the single event that determines whether the operating recovery reported here compounds or is absorbed by the capital structure, and would look next at the Centenario ramp toward the stated 24 kt-LCE annual capacity, at whether Indonesia approves the higher nickel quota, and at the December gearing test.
