Lithium miner Allkem released a bullish first set of results since being formed by the merger of Galaxy Resources and Orocobre last August, and like Pilbara Minerals last week, it’s clear the lithium price boom is starting to pay off for producers.
Allkem reported that revenue rose more than 400% to $US192.3 million for the December half year, helping the newly merged company to a profit of $13 million.
These results include Galaxy’s contribution from August 25 to December 31.
The company says Lithium carbonate prices for the current half year are expected to be around US$25,000 a tonne FOB (freight on board), up around 125% on the December half year and up 25% from previous guidance.
And yet the shares eased 0.3% to $9.07 on that potential.
Allkem CEO, Martin Perez de Solay said in the announcement: “Post-merger we achieved record revenue for the Group, not only from strengthened pricing but from successfully and safely producing high-quality lithium products from our global operations that continue to meet the requirements and specifications of our long-term customers.”
The company said revenue included $US114.9 million from Mt Cattlin (Galaxy) and US$65.6 million from Olaroz (Orocobre)
The company said that revenue from Mt Cattlin was generated by sales of 96,871 tonnes of spodumene concentrate, grading 5.7% Lithium oxide, at an average price of $US1,186/tonne (cartage insurance and fright or CIF) or the period from 25 August 2021.
Revenue from Olaroz was generated from sales of 5,915 tonnes of lithium carbonate, a 143% revenue increase from the previous corresponding period, largely due to average FOB pricing increasing by 218% to $US11,095a tonne.
The company said gross profit for the half was $US118 million with group consolidated net profit after tax of $US13.0 million (31 December 2020: loss of $US29.1 million) “reflecting improved product prices and comprehensive cost management mitigating inflationary pressures.
Allkem said that at the end of December 2021, it held cash and cash equivalents of $US449.8 million
