Largo(US:LGO)2023-05-10 21:01Financial Performance - Revenues for Q1 2023 increased to $57,421,000, up 34.4% from $42,688,000 in Q1 2022[5] - Net loss for Q1 2023 was $1,207,000, an improvement from a net loss of $1,954,000 in Q1 2022[5] - The company reported a basic loss per share of $0.02 for Q1 2023, compared to a loss of $0.03 per share in Q1 2022[5] - For the three months ended March 31, 2023, Largo Inc. reported a net loss of $1,207,000, an improvement from a net loss of $1,954,000 in the same period of 2022[7] - Net income for the same period was $1,511,000, a decrease from $3,367,000 in the previous year[49] - The net income for the first quarter of 2023 was $200, compared to a net loss of $1,954 in Q1 2022, indicating a significant improvement in profitability[52] Operating Costs - Operating costs rose to $45,931,000, compared to $28,958,000 in the same period last year, reflecting a 58.5% increase[5] - Total expenses for Q1 2023 were $45,931,000, compared to $28,958,000 in Q1 2022, reflecting a rise of 58.5%[85] - Direct mine and production costs surged to $28,419,000 in Q1 2023, up from $17,560,000 in Q1 2022, marking an increase of 62.0%[85] - Finance costs, including interest expense and fees, rose significantly to $1,351,000 in Q1 2023 from $117,000 in Q1 2022, a staggering increase of 1,152.1%[85] Assets and Liabilities - Total assets as of March 31, 2023, were $382,444,000, up from $355,750,000 at the end of 2022, representing a 7.5% increase[4] - Total liabilities increased to $105,558,000, compared to $81,196,000 at the end of 2022, reflecting a 30% increase[4] - Total liabilities from financing activities remained unchanged at $40,000 as of December 31, 2022 and March 31, 2023[29] - The company’s total liabilities decreased from $26,960 as of December 31, 2022 to $25,290 as of March 31, 2023, a decrease of 6.19%[27] Cash Flow and Liquidity - Cash and cash equivalents increased to $61,575,000 from $54,471,000, marking a 13.1% rise[4] - Cash provided by operating activities was $4,953,000, compared to a cash used of $4,050,000 in the prior year, indicating a significant turnaround[7] - Total cash position at the end of the period was $61,575,000, down from $78,394,000 at the end of March 2022[7] - The company's cash flow from operating activities and cash balance increased to $61,575,000 as of March 31, 2023, compared to $54,471,000 on December 31, 2022[77] Inventory and Receivables - Inventory decreased to $56,853,000 from $64,221,000, a decline of 11.4%[4] - Trade receivables increased to $30,299,000 as of March 31, 2023, up from $18,285,000 at the end of 2022[17] - Inventory decreased to $56,853,000 from $64,221,000 year-over-year, with finished products valued at $41,142,000[18] Financing Activities - The company received $25,000,000 in debt financing during the quarter, contributing to a net cash provided by financing activities of $25,305,000[7] - The company secured a new two-year debt facility of $15,000 in January 2023, with an interest rate of 6.85% per annum[33] - The company’s cash flows from financing activities included proceeds of $25,000 in total debt during the year ended December 31, 2022[29] Legal and Regulatory Matters - Management has recognized a provision of R$27,106 ($5,335) related to legal proceedings in Brazil, reflecting ongoing legal risks[60] Market and Product Developments - The company is advancing renewable energy storage solutions through its vanadium redox flow battery technology (VRFB) and is implementing an ilmenite concentration plant[8] - The Maracás Menchen Mine has reached commercial production, with the company holding a 99.94% economic interest in the mine[22] - The company is committed to purchasing 60 tonnes of vanadium per month from third parties for the remainder of 2023, ensuring supply stability[57] - An exclusive off-take agreement was signed for the purchase of 220 tonnes of vanadium products in 2023, securing future revenue streams[56] - The company has a royalty obligation of 7.5% on net sales of each VRFB containing licensed products, which was amended to a fixed royalty of $120 per kilowatt capacity starting April 2023[58] Foreign Exchange and Risk Management - The company recognized an unrealized gain on foreign currency translation of $4,881,000 in Q1 2023[5] - A 5% change in the value of the Canadian dollar, Euro, and Swiss franc relative to the U.S. dollar would affect cash balances by approximately $182,000[81] - A 5% change in the value of the Brazilian real relative to the U.S. dollar would impact Brazilian real cash balances by approximately $165,000[81] - The company had no debt subject to floating interest rates as of March 31, 2023, mitigating interest rate risk[78] Management Compensation - Short-term benefits for key management personnel increased to $1,090,000 in Q1 2023 from $634,000 in Q1 2022[46]