Investing.com | Editor Hari G
Published Nov 01, 2023 23:52
In its Third Quarter 2023 Earnings Release Conference Call, Livent Corporation (NYSE:LTHM) reported an 8% YoY increase in adjusted EBITDA to $120 million, with a flat margin compared to the previous quarter and a nine percentage point higher margin than the same quarter last year. The company revised its full-year 2023 financial guidance primarily due to lower expected volumes sold and a smaller expected price increase YoY. It now projects full-year 2023 revenue to be in the range of $890 million to $940 million and adjusted EBITDA to be in the range of $500 million to $530 million, representing a significant growth of 13% and 14% respectively.
Key takeaways from the call include:
Livent also discussed the progress of its merger with Allkem, stating that the merger has received all required pre-closing regulatory approvals, except for foreign investment screening in Australia. Shareholder approval is expected to take place in late Q4, and the merger is set to close by the end of 2023. The company also addressed concerns about a potential slowdown in demand, stating that they do not see any significant changes in the market and that supply will continue to be the constraint on demand.
In terms of supply chain constraints, Livent mentioned that supply will continue to be a constraint on demand for the foreseeable future. They also revised down their guidance primarily due to volume, but offset by cost improvements. They discussed potential funding for the Nemaska project and stated that they expect to fund their portion internally. The company expressed interest in exploring M&A opportunities in Australia and mentioned the disconnect between value and early-stage projects. They stated that they want to have a significant mining presence in Australia.
Lastly, Livent highlighted its strategy of maximizing the sale price of its lithium units and reducing pricing volatility to create predictability of earnings. The company expects its cash flow to continue growing due to locked-in prices and predictable profitability. They also mentioned that tolling is not a sensible option for their new hydroxide capacity and that purchasing third-party carbonate is a possibility.
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Written By: Investing.com
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