AMG details impact of COVID-19 on Q2
On July 31, 2020 By Alice AgoosIn Uncategorized
AMG Advanced Metallurgical Group estimates that COVID-19 had an $18-million impact on its second-quarter EBITDA.
Commenting specifically on the pandemic’s effect on its Critical Materials segment, AMG said, “we saw decreased and postponed volumes from our aerospace and automotive customers, and we faced pandemic-related shipping issues, which increased costs for our business. In addition, US steel production volumes were significantly below previous downturns, which negatively impacted vanadium price.”
Revenue at AMG Critical Materials in the second quarter fell 36% to $127.4-million compared to $198.5-million in Q2 2019, driven largely by lower average prices across all seven business units during the quarter, partially offset by higher sales volumes of ferrovanadium and lithium concentrate.
Gross profit for AMG Critical Materials in the second quarter increased by $34.9-million to $9.7-million compared to a gross loss of $25.2-million in Q2 2019. The increase was primarily driven by a non-cash expense in the prior year related to a vanadium inventory adjustment as a result of lower vanadium prices.
AMG Critical Materials’ gross profit excluding exceptional items fell 46% to $12.2-million in the second quarter compared to $22.6-million in Q2 2019. EBITDA fell 55% to $5.5-million compared to $12.4-million in the year-ago quarter.
As of June 30, AMG has committed $166-million in construction and engineering contracts for a new FeV plant in Zanesville, OH, that will double the company’s capacity for recycling spent catalysts to 70,000 mtpy and double vanadium production capacity to 12-million ppy. The project remains on schedule to be completed in 2021, AMG said.
In addition, AMG’s joint venture with Shell is operating and continues to pursue refinery residue recycling opportunities globally.
Second-quarter revenue for AMG Advanced Metallurgical Group fell 32% to $207.6-milllion compared to revenue of $303.6-million in Q2 2019. Pandemic-induced lower volumes and prices versus the year-ago quarter resulted in EBITDA for the second quarter falling 67% to $7.8-million, AMG said.