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Lithium Performance Drives AMG to All-time Record Earnings and Increased Full Year Guidance
02 NOV 2022 18:00 CET
Amsterdam, 2 November 2022 (Regulated Information) --- AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”), a global critical materials company at the forefront of CO2 reduction trends, reported third quarter 2022 revenue of $425 million, a 36% increase versus the third quarter of 2021. Third quarter 2022 EBITDA of $103 million was the highest in AMG’s history, and a 210% increase versus the third quarter of 2021.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “This outstanding result was largely driven by AMG Lithium. The continued strength in both lithium demand and our low-cost position led to improved profitability in AMG Lithium in Brazil. The mission of AMG Lithium is to be the number one producer of electric vehicle battery materials in Europe by expanding production of battery-grade hydroxide, vertically integrating its Brazilian spodumene production and pursuing additional mineral resources.”
Outlook
Given the strong performance to date and the visibility into year end, AMG is increasing its EBITDA guidance for the full year 2022 to $320 million or higher, from a previous range of between $280 million and $300 million.
Important parameters for 2023 guidance are first and foremost the startup of the expanded production of lithium concentrate in Brazil in the second half of 2023; the market conditions primarily in lithium; and the ramp-up of the Zanesville refinery to full production. In view of this, AMG’s EBITDA guidance for 2023 is to exceed $400 million. It is important to note that since the increase of spodumene production will occur in the latter half of the year, 2023 EBITDA development will be back-end weighted.
Strategic Highlights
Lithium
The project to expand the spodumene production in AMG Brazil is under construction. The objective is to be at full capacity in the second half of 2023.
The AMG Lithium refinery in Bitterfeld, Germany, Europe’s first lithium hydroxide refinery, is under construction, and commissioning for the first 20,000-ton module of the battery-grade lithium hydroxide upgrader will commence in the fourth quarter of 2023.
AMG Lithium’s battery-grade hydroxide refinery has signed a binding supply agreement with EcoPro, a leading South Korean cathode paste producer, for an initial three-year term to deliver a minimum of 5,000 tons per annum of battery-grade lithium hydroxide to EcoPro’s cathode materials production plant in Debrecen, Hungary.
AMG has negotiated a strategic tolling contract for our spodumene production as well as third-party spodumene to supply technical-grade hydroxide to Bitterfeld.
AMG has consolidated its lithium value chain under one legal entity and is currently aligning its lithium management and governance structures to further increase the long-term value of its lithium activities. Accordingly, we are preparing a re-segmentation of AMG to be approved by the Supervisory Board in December and become effective on January 1, 2023.
Vanadium
The new vanadium spent catalyst recycling facility in Zanesville, Ohio, which started operating on October 29, 2022, is a clear manifestation of AMG’s industry leadership in the recycling of hazardous refinery waste globally. We are extremely pleased about the successful startup of both the roaster and the melt shop, and we expect the ramp-up to full production to take between three to four months.
Shell & AMG Recycling B.V. (“SARBV”) and its partner, the United Company for Industry (“UCI”), continue to advance the first project of the Supercenter in conjunction with Saudi Arabian Oil Company (“Aramco”). Plant design optimization, site selection and permitting activities are progressing and the FEL3 partnering with Hatch is expected to begin later this month. The SARBV-UCI-Aramco consortium are also developing a pipeline of projects which will conclude with the deployment of AMG’s LIVA Hybrid Energy Storage System technology.
AMG’s innovative lithium vanadium battery (“LIVA”) for industrial power management applications has successfully started up at our plant in Hauzenberg, Germany.
Financial Highlights
Revenue increased by 36% to $425 million in the third quarter of 2022 from $312 million in the third quarter of 2021.
EBITDA was a record $103 million in the third quarter of 2022, up 210% versus the third quarter 2021 EBITDA of $33 million.
Annualized return on capital employed was 29.5% for the first nine months of 2022, more than double the 10.4% for the same period in 2021.
Cash flow from operations was $75 million for the third quarter 2022, driven by the high profitability of AMG Lithium in Brazil.
Net income attributable to shareholders for the third quarter of 2022 was $68 million, yielding $2.09 diluted earnings per share, compared to $0.02 diluted loss per share in the third quarter of 2021.
AMG’s liquidity as of September 30, 2022 was $489 million, with $306 million of unrestricted cash and $183 million of revolving credit availability.
Key Figures