-- Record Financial Performance Achieved in Second Quarter --
-- Entered into Long-Term Supply Agreement with General Motors --
-- Raises 2022 Full Year Revenue and Adjusted EBITDA Guidance --
PHILADELPHIA, Aug. 2, 2022 /PRNewswire/ -- Livent Corporation (NYSE: LTHM) today reported results for the second quarter of 2022.
Livent Corporation (PRNewsfoto/Livent Corporation)
Revenue was $218.7 million, up 52% and 114% from the first quarter of 2022 and the prior year, respectively. Reported GAAP net income was $60.0 million, 13% higher than the previous quarter, and 31 cents per diluted share. Adjusted EBITDA was $95.0 million, 78% higher than the previous quarter and roughly six times higher than the prior year, and adjusted earnings per share were 37 cents per diluted share. Continued improvement in lithium market conditions and strong customer demand in the second quarter supported higher realized prices.
"Lithium demand was exceptionally strong through the first half of 2022. Published lithium prices in all forms moved higher in the second quarter amid tight market conditions," said Paul Graves, president and chief executive officer of Livent. "We continue to achieve higher realized prices across our entire product portfolio."
Agreement with General Motors
As announced in a joint press release last week, Livent entered into a long-term supply agreement with General Motors (GM). This six-year agreement, which will deliver lithium hydroxide beginning in 2025, will also come with a $198 million advance payment from GM to be made in 2022. The upfront payment strengthens the binding commitments being made by both parties and establishes a foundation for expanding the relationship over time. This structure increases flexibility and certainty for Livent as it funds and executes its capacity expansion plans.
"The challenges are increasing for the lithium industry to grow battery-grade lithium hydroxide and carbonate supply enough to keep up with significant annual demand increases," continued Graves. "As a result, auto OEMs are becoming more focused on securing reliable lithium supply to support their own aggressive electrification plans. We remain focused on executing our expansion plans to meet the growing needs of our customers and look forward to the beginning of a long-term relationship with GM, given our shared commitment to sustainability and strengthening electric vehicle supply chains in North America."
Livent remains on schedule to deliver on all of its previously announced capacity expansions. The first 10,000 metric tons expansion of lithium carbonate in Argentina will be mechanically complete by year-end 2022 and in commercial production by the first quarter of 2023. The Company's 5,000 metric ton expansion of lithium hydroxide in Bessemer City will be mechanically complete by the end of Q3 2022 and in commercial production the following quarter.
Livent is on track to add another 10,000 metric tons of lithium carbonate capacity in Argentina by the end of 2023. This will nearly double Livent's total available LCEs (1) from 2021 levels. The Company also expects to add another 15,000 metric tons of lithium hydroxide capacity at a new location in China by the end of 2023.
Nemaska, a joint venture in which Livent is a 50% partner, is concluding all remaining work on its construction plan, which is expected to be finalized by the end of the third quarter of this year. Nemaska will be a fully integrated asset located in Quebec, Canada, with an expected 34,000 metric tons of nameplate capacity of battery-grade lithium hydroxide and first production in the second half of 2025.
Livent published its 2021 Sustainability Report in early July, reflecting the company's commitment to responsible production and expansion through its ongoing focus on environmental protection, social responsibility and transparency. The report underscores Livent's view that lithium will continue to play a critical role in global decarbonization efforts and the shift to electrification. Among the highlights of the report are an update on Livent's progress against its 2030 and 2040 ESG goals, data points from recent Life Cycle Assessments of key lithium products and an overview of the company's initiatives around the world for responsible operations and growth. Key ESG metrics in the report were reviewed and assured by a third-party. Livent's 2021 Sustainability Report, with the theme of Growing Responsibly, is available at https://livent.com/sustainability.
Guidance and Outlook (2)
Livent has further improved its guidance for 2022 financial performance. This is underpinned by expectations for higher realized pricing across all lithium products, with no change to underlying volume assumptions. For the full year, Livent now projects revenue to be in the range of $800 million to $860 million and Adjusted EBITDA to be in the range of $325 million to $375 million.
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