Allkem Limited (ASX|TSX:
AKE,
“
Allkem” or the “
Company”)
provides financial results for the Allkem Group (
the
Group) for the year ended 30 June 2023.
HIGHLIGHTS
- Record annual group revenue of US$1,207.8 million achieved, a
~1.6x increase year on year (“YoY”)
- Excellent operating performance and highly supportive market
conditions generated group gross profit of US$1,065.8 million with
group EBITDAIX of US$909.8 million and consolidated net profit
after tax from continuing operations of US$524.6 million
- The Olaroz Lithium Facility2 achieved record annual production
of 16,703 tonnes, ~30% higher YoY and from the prior record in
FY22
- Record revenue at Olaroz increased 102% to total US$592.2
million on sales of 13,186 tonnes of lithium carbonate including
US$12.3 million of revenue generated from by-product sales
- Average realised pricing for lithium carbonate almost doubled
YoY to US$43,981/t FOB3. The gross cash margin of 89% remains
robust
- Mt Cattlin produced 130,984 dry metric tonnes
(“dmt”) of spodumene concentrate with significant
operational improvements made by year end
- Record revenue at Mt Cattlin of US$615.6 million, a 36% YoY
increase which includes US$513.7 million generated from spodumene
sales of 105,291 dmt and US$99.7 million revenue generated from
low-grade sales
- Average price for spodumene increased by ~2.2x YoY to US$4,879/
tonne CIF. Gross cash margin of 78% was similar to FY22
- Strong cash generation and existing net cash balance4 of
US$648.4m is expected to fully fund committed projects
DEVELOPMENT PROJECTS
- Olaroz Stage 2 achieved first wet production in mid-July with
commissioning to continue and ramp up over the next 12-18
months
- Naraha successfully achieved first production of lithium
hydroxide in late 2022 and battery grade qualification commenced
with customers in July
- The Olaroz Resource increased 27% to 20.7Mt LCE providing
excellent expansion potential
- Mt Cattlin’s Ore Reserve Update confirmed an additional 4-5
year mine life to 2027-2028
- Sal de Vida was issued EIA approval from the Catamarca
government enabling the planned 15ktpa production capacity. A
resolution was issued permitting the construction of the solar farm
and water easements were issued
- The liner installation has been completed on the first two
strings of ponds at Sal de Vida Stage 1, earthworks for string 3
are underway, and construction of the carbonation plant has
commenced
- Federal approval for the James Bay ESIA was obtained in January
2023 and a new high-grade zone of mineralisation was
identified
- Post reporting period the total resource at James Bay increased
173% to 110.2 Mt @ 1.30% Li2O
Allkem Managing Director and CEO, Martin Perez de Solay
says:
“We have achieved outstanding full year results
and demonstrated the quality and profitability of our operations.
FY23 Revenue and EBITDAIX hit new records and were underpinned by
record production at Olaroz and strong performance at Mt Cattlin,
which achieved record run rates towards the end of the year.
Our team has reached significant milestones to
capture global growth by increasing our production capacity and
product offering. Amidst strong demand for lithium we delivered
first production at the Naraha Lithium Hydroxide Plant and achieved
first production at Olaroz Stage 2. Sal de Vida construction is
well underway, and James Bay is advancing with approvals received
by the Federal government for the ESIA.
With two revenue generating operations being
supplemented in the near future by Olaroz Stage 2 and a strong
balance sheet, we are fully funded to complete construction at Sal
de Vida and the development of James Bay.
Our strategy to create a leading global
integrated lithium chemicals producer will be accelerated by the
proposed merger with Livent.”
GROUP PROFIT OVERVIEW
The Allkem Group (the Group) produced a Group
EBITDAIX of US$909.8 million (2022: US$512.0 million) and total
profit for the year from continuing operations of US$524.6 million
(2022: US$334.7 million). The total profit for the year from
continuing operations includes one off charges of US$9.9 million
related to merger with Livent, gains of US$66.0 million from
financial instruments, and foreign exchange losses of US$83.3
million. Net finance income was US$48.2 million.
Net assets of the Group increased to US$3,573.8
million as at 30 June 2023 (30 June 2022: US$3,081.4 million)
including total cash balances of US$821.4 million (30 June 2022:
US$663.5 million).
Group capital expenditure for the year totalled
US$502.9 million (30 June 2022: US$238.7 million) and the Mizuho
loans were reduced by US$37.6m.
|
Group |
Olaroz |
Mt Cattlin |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 5 |
|
|
US $'000 |
|
US $'000 |
|
US $'000 |
|
US $'000 |
|
US $'000 |
|
US $'000 |
|
Revenue |
1,207,801 |
|
744,683 |
|
592,211 |
|
292,758 |
|
615,590 |
|
451,925 |
|
EBITDAIX
1 |
909,769 |
|
511,996 |
|
475,181 |
|
220,431 |
|
515,881 |
|
336,178 |
|
Less depreciation & amortisation |
(98,786 |
) |
(49,910 |
) |
(16,320 |
) |
(17,717 |
) |
(80,259 |
) |
(30,309 |
) |
EBITIX
2 |
810,983 |
|
462,086 |
|
458,861 |
|
202,714 |
|
435,622 |
|
305,869 |
|
Less interest income/(costs) |
48,240 |
|
(14,200 |
) |
13,830 |
|
(24,153 |
) |
18,119 |
|
1,177 |
|
EBTIX
3 |
859,223 |
|
447,886 |
|
472,691 |
|
178,561 |
|
453,741 |
|
307,046 |
|
Less merger costs |
(9,945 |
) |
- |
|
- |
|
- |
|
- |
|
- |
|
Less acquisition costs |
- |
|
(12,760 |
) |
- |
|
- |
|
- |
|
- |
|
Less amortisation of customer
contracts due to purchase price allocation |
- |
|
(13,400 |
) |
- |
|
- |
|
- |
|
(13,400 |
) |
Less inventory adjustment due to
purchase price allocation |
- |
|
(12,367 |
) |
- |
|
- |
|
- |
|
(12,367 |
) |
Add other income – gains from
financial instruments |
66,023 |
|
31,666 |
|
- |
|
- |
|
- |
|
- |
|
Add foreign currency
gains/(losses) |
(83,280 |
) |
(10,260 |
) |
(79,143 |
) |
(7,481 |
) |
908 |
|
1,099 |
|
Less share of loss of associates,
net of tax |
(2,114 |
) |
(2,951 |
) |
- |
|
- |
|
- |
|
- |
|
Less (impairment/write-downs)/ add realisation of inventory
write-downs |
- |
|
(244 |
) |
- |
|
- |
|
- |
|
- |
|
Segment profit/(loss) for
the period before tax |
829,907 |
|
427,570 |
|
393,548 |
|
171,080 |
|
454,649 |
|
282,378 |
|
Income tax expense |
(305,332 |
) |
(92,884 |
) |
(158,810 |
) |
(74,935 |
) |
(130,879 |
) |
(84,713 |
) |
Total profit for the year
– continuing operations |
524,575 |
|
334,686 |
|
234,738 |
|
96,145 |
|
323,770 |
|
197,665 |
|
Discontinued operations 4 |
(3,278 |
) |
2,537 |
|
|
|
|
|
Total profit for the year |
521,297 |
|
337,223 |
|
|
|
|
|
- EBITDAIX - Segment earnings before interest, taxes,
depreciation, amortisation, impairment, merger costs, gains from
financial instruments, foreign currency gain/(losses), share of
associate losses, business combination acquisition costs and
non-cash business combination adjustments.
- EBITIX - Segment earnings before interest, taxes, impairment,
merger costs, gains from financial instruments, foreign currency
gains/(losses), share of associate losses, business combination
acquisition costs and non-cash business combination
adjustments.
- EBTIX - Segment earnings before taxes, impairment, merger
costs, gains from financial instruments, foreign currency
gains/(losses), share of associate losses, business combination
acquisition costs and non-cash business combination
adjustments.
- The discontinued operations represent the results of
Borax.
- Includes the results from 25 August 2021 to 30 June 2022.
This release was authorised by Mr Martin Perez de
Solay, CEO and Managing Director of Allkem Limited.
Allkem
LimitedABN 31 112 589 910 Level 35, 71 Eagle StBrisbane,
QLD 4000 |
Investor Relations & Media EnquiriesAndrew
Barber M: +61 418 783 701 E:
Andrew.Barber@allkem.coPhoebe LeeP: +61 7 3064
3600 E: Phoebe.Lee@allkem.co |
Connectinfo@allkem.co+61 7 3064
3600www.allkem.co |
IMPORTANT NOTICES
This investor ASX/TSX release
(Release) has been prepared by Allkem Limited (ACN
112 589 910) (the Company or
Allkem). It contains general information about the
Company as at the date of this Release. The information in this
Release should not be considered to be comprehensive or to comprise
all of the material which a shareholder or potential investor in
the Company may require in order to determine whether to deal in
Shares of Allkem. The information in this Release is of a general
nature only and does not purport to be complete. It should be read
in conjunction with the Company’s periodic and continuous
disclosure announcements which are available at allkem.co and with
the Australian Securities Exchange (ASX)
announcements, which are available at www.asx.com.au.
This Release does not take into account the
financial situation, investment objectives, tax situation or
particular needs of any person and nothing contained in this
Release constitutes investment, legal, tax, accounting or other
advice, nor does it contain all the information which would be
required in a disclosure document or prospectus prepared in
accordance with the requirements of the Corporations Act 2001 (Cth)
(Corporations Act). Readers or recipients of this
Release should, before making any decisions in relation to their
investment or potential investment in the Company, consider the
appropriateness of the information having regard to their own
individual investment objectives and financial situation and seek
their own professional investment, legal, taxation and accounting
advice appropriate to their particular circumstances.
This Release does not constitute or form part of
any offer, invitation, solicitation or recommendation to acquire,
purchase, subscribe for, sell or otherwise dispose of, or issue,
any Shares or any other financial product. Further, this Release
does not constitute financial product, investment advice (nor tax,
accounting or legal advice) or recommendation, nor shall it or any
part of it or the fact of its distribution form the basis of, or be
relied on in connection with, any contract or investment
decision.
The distribution of this Release in other
jurisdictions outside Australia may also be restricted by law and
any restrictions should be observed. Any failure to comply with
such restrictions may constitute a violation of applicable
securities laws.
Past performance information given in this
Release is given for illustrative purposes only and should not be
relied upon as (and is not) an indication of future
performance.
Forward Looking StatementsForward-looking
statements are based on current expectations and beliefs and, by
their nature, are subject to a number of known and unknown risks
and uncertainties that could cause the actual results, performances
and achievements to differ materially from any expected future
results, performances or achievements expressed or implied by such
forward-looking statements, including but not limited to, the risk
of further changes in government regulations, policies or
legislation; the risks associated with the continued implementation
of the merger between the Company and Galaxy Resources Ltd, risks
that further funding may be required, but unavailable, for the
ongoing development of the Company’s projects; fluctuations or
decreases in commodity prices; uncertainty in the estimation,
economic viability, recoverability and processing of mineral
resources; risks associated with development of the Company
Projects; unexpected capital or operating cost increases;
uncertainty of meeting anticipated program milestones at the
Company’s Projects; risks associated with investment in publicly
listed companies, such as the Company; and risks associated with
general economic conditions.
Subject to any continuing obligation under
applicable law or relevant listing rules of the ASX, the Company
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statements in this Release to
reflect any change in expectations in relation to any
forward-looking statements or any change in events, conditions or
circumstances on which any such statements are based. Nothing in
this Release shall under any circumstances (including by reason of
this Release remaining available and not being superseded or
replaced by any other Release or publication with respect to the
subject matter of this Release), create an implication that there
has been no change in the affairs of the Company since the date of
this Release.
Competent Person StatementsAny information in
this announcement that relates to Mt Cattlin’s Mineral Resources
and Reserves is extracted from the report entitled “Mt Cattlin
Annual Ore Resource and Reserve update at 30 June, 2023” released
on 1 August 2023 which is available to view on www.allkem.co and
www.asx.com.au. The Company confirms that it is not aware of any
new information or data that materially affects the information
included in the original market announcements and that all material
assumptions and technical parameters underpinning the Mineral
Resources estimates in the relevant market announcement continue to
apply and have not materially changed. The Company confirms that
the form and context in which the Competent Person’s findings are
presented have not been materially modified from the original
market announcement.
Technical information relating to the Company’s
Mt Cattlin project contained in this release is derived from, and
in some instances is an extract from, the technical report entitled
“Mt Cattlin Stage 4 Expansion Project” (Technical Report) which has
been reviewed and approved by Albert Thamm, F.Aus.IMM (who is an
employee of Galaxy Resources Pty. Ltd) as it relates to geology,
drilling, sampling, exploration, QA/QC and mineral resources and
Daniel Donald F.Aus.IMM (an employee of Entech Pty Ltd) as it
relates to mining methods, Ore Reserves, site infrastructure,
capital cost, operating cost estimates, mining cost, financial
modelling and economic analysis in accordance with National
Instrument 43-101 – Standards for Disclosure for Mineral Projects.
The Technical Report will be available for review under the
Company’s profile on SEDAR at www.sedar.com.
Any information in this announcement that
relates to Olaroz Project Mineral Resources is extracted from the
report entitled “Olaroz Resource increase 27% to 20.7Mt” released
on 27 March 2023 which is available to view on www.allkem.co and
www.asx.com.au. The Company confirms that it is not aware of any
new information or data that materially affects the information
included in the original market announcements and that all material
assumptions and technical parameters underpinning the Mineral
Resources estimates in the relevant market announcement continue to
apply and have not materially changed. The Company confirms that
the form and context in which the Competent Person’s findings are
presented have not been materially modified from the original
market announcement.
Technical information relating to the Company’s
Olaroz project contained in this release is derived from, and in
some instances is an extract from, the report entitled “Olaroz
Resource increase 27% to 20.7Mt” released on 27 March 2023 which is
available to view on www.allkem.co and www.asx.com.au and the
technical report entitled “Olaroz Resource Update March 2023”
(Technical Report) which has been reviewed and approved by Murray
Brooker (Hydrominex Geoscience Pty Ltd) as it relates to geology,
drilling, sampling, exploration, QA/QC, mining methods and mineral
resources and Mr Mike Gunn (Gunn Metals) as it relates to site
infrastructure, capital cost, operating cost estimates, mining
cost, financial modelling and economic analysis in accordance with
National Instrument 43-101 – Standards for Disclosure for Mineral
Projects. The Technical Report is available for review under the
Company’s profile on SEDAR at www.sedar.com.
Any information in this announcement that
relates to James Bay Mineral Resources & Ore Reserves is
extracted from the report entitled “James Bay resource increased by
173% to 110Mt” released on 11 August 2023 which is available to
view on www.allkem.co and www.asx.com.au. The Company confirms that
it is not aware of any new information or data that materially
affects the information included in the original market
announcements and that all material assumptions and technical
parameters underpinning the Mineral Resources and Ore Reserves
estimates in the relevant market announcement continue to apply and
have not materially changed. The Company confirms that the form and
context in which the Competent Person’s findings are presented have
not been materially modified from the original market
announcement.
Technical information relating to the Company’s
James Bay project contained in this release is derived from, and in
some instances is an extract from, the report entitled “James Bay
resource increased by 173% to 110Mt” released on 11 August 2023
which is available to view on www.allkem.co and www.asx.com.au and
the technical report entitled “NI 43-101 Technical Report
Feasibility Study James Bay Lithium Project, Québec, Canada”
released on January 11th, 2022 (Technical Report) which has been
reviewed and approved by James Purchase, P.Geo, MAusIMM (CP) (who
is an employee of Galaxy Lithium (Canada) Inc.) as it relates to
geology, drilling, sampling, exploration, QA/QC and mineral
resources in accordance with National Instrument 43-101 – Standards
for Disclosure for Mineral Projects. The Technical Report will be
available for review under the Company’s profile on SEDAR at
www.sedar.com.
Not for
release or distribution
in the United States
This announcement has been prepared for
publication in Australia and may not be released to U.S. wire
services or distributed in the United States. This announcement
does not constitute an offer to sell, or a solicitation of an offer
to buy, securities in the United States or any other jurisdiction,
and neither this announcement or anything attached to this
announcement shall form the basis of any contract or commitment.
Any securities described in this announcement have not been, and
will not be, registered under the U.S. Securities Act of 1933 and
may not be offered or sold in the United States except in
transactions registered under the U.S. Securities Act of 1933 or
exempt from, or not subject to, the registration of the U.S.
Securities Act of 1933 and applicable U.S. state securities
laws.
1. From continuing operations2. All figures 100% Olaroz Project
Basis. 3. “FOB” (Free On Board) excludes insurance and freight
charges included in “CIF” (Cost, Insurance, Freight) pricing.
Therefore, the Company’s FOB reported prices are net of freight
(shipping), insurance and sales commission. 4. Net cash includes
Naraha cash balances and project loans at 75% interest, and Olaroz
cash deposits to secure project borrowing and deposits that are
held as guarantees. Related party loans are excluded.
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