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Livent Posts Q3 Results, Says Capacity Expansions Remain on Track
Top lithium producer Livent published its quarterly results on November 1.
Strong demand coupled with higher lithium prices allowed top-producing miner Livent (NYSE:LTHM) to post a 124 percent increase in its year-on-year revenue in the third quarter.
Livent operates its lithium business in the Salar del Hombre Muerto in Argentina, where it has been extracting lithium for more than 20 years. The lithium carbonate produced serves as the feedstock for Livent’s downstream lithium hydroxide production. Livent is also currently producing qualified battery-grade lithium hydroxide in both the US and China.
Livent’s third quarter revenue hit US$231.6 million, up 6 percent from the previous quarter. Meanwhile, the company's adjusted EBITDA came in at US$110.8 million, 17 percent higher than the prior quarter.
"Lithium demand has remained robust despite some near-term supply chain disruptions and global macro concerns," said CEO Paul Graves in a statement on Tuesday (November 1). "Published lithium prices moved higher in the third quarter amid continued favorable market conditions. Livent achieved higher realized prices and delivered increased volumes to customers."
Last year, lithium prices climbed on the back of strong demand from the electric vehicle industry. By the end of Q3 of this year, prices had increased more than 123 percent, according to Benchmark Mineral Intelligence data.
Even so, the Philadelphia-based company has revised its adjusted EBITDA to be in the range of US$350 million to US$370 million, cutting the top end of its expectations by US$5 million. The company also trimmed its forecast revenue to a span of US$815 million to US$845 million for 2022, compared to previous guidance of US$800 million to US$860 million.
Following the release of its third quarter results, Livent's share price fell almost 9 percent.
In terms of its ongoing expansions, the company said it remains on track to deliver all previously announced capacity expansions.
The first 10,000 metric ton (MT) expansion of lithium carbonate capacity in Argentina is expected to be mechanically complete by the end of 2022, and in production by 2023's first quarter. Following on from that, the company said it is set to add the next 10,000 MT of lithium carbonate capacity in Argentina by the end of 2023.
Lithium hydroxide capacity is also forecast to increase, and the miner has started work at a China-based location to add an additional 15,000 MT of lithium hydroxide capacity by the end of 2023.
Additionally, the company's 5,000 MT lithium hydroxide expansion at Bessemer City was mechanically completed in the third quarter, and Livent has begun working with customers to produce and qualify products.
In Quebec, Livent owns 50 percent of Nemaska, which is expected to have 34,000 MT of battery-grade lithium hydroxide nameplate capacity and over 30 years of mine life. The first "meaningful" production from the project is on track for 2026.
Supported by favorable lithium market conditions, the company’s share price is up more than 18 percent year-to-date. Other US, Canadian and Australian lithium stocks have also seen year-to-date gains.
As of 9:00 a.m. EST on Wednesday (November 2), shares of Livent were trading at US$28.51.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Priscila is originally from Buenos Aires, Argentina, where she earned a BA in Communications at Universidad de San Andres. She moved to Vancouver for the first time in 2010 and fell in love with the city. A few years after she went to London, UK, to study a MA in Journalism at Kingston University and came back in 2016. She enjoys reading, drinking coffee and travelling.
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