Largo(US:LGO)2023-08-09 21:49Financial Performance - Total revenues for Q2 2023 were $53,110, a decrease of 37.5% compared to $84,804 in Q2 2022[5] - Net loss for Q2 2023 was $5,966, compared to a net income of $17,965 in Q2 2022, reflecting a significant decline[5] - Comprehensive income for Q2 2023 was $4,257, compared to a loss of $1,354 in Q2 2022, indicating a positive turnaround[5] - For the three months ended June 30, 2023, Largo Inc. reported a net loss of $5,966,000 compared to a net income of $17,965,000 for the same period in 2022, representing a significant decline[7] - Total revenues for the six months ended June 30, 2023, were $110,531, a decrease of 13.3% compared to $127,492 for the same period in 2022[57] - Net income for the six months ended June 30, 2023, was a loss of $7,173, compared to a net income of $16,011 for the same period in 2022[61] Assets and Liabilities - Total assets increased to $393,319 as of June 30, 2023, up from $355,750 as of December 31, 2022, representing an increase of 10.5%[4] - Total liabilities increased to $111,763, up from $81,196 at the end of 2022, marking a rise of 37.5%[4] - The total assets of the company as of June 30, 2023, were $393,319, while total liabilities stood at $111,763[49] - Total debt increased to $65,000 as of June 30, 2023, up from $40,000 at December 31, 2022, representing a 62.5% increase[28] - Total liabilities from financing activities amounted to $65,000 as of June 30, 2023, compared to $40,000 at December 31, 2022, indicating a significant increase in financing[29] Cash and Cash Equivalents - Cash and cash equivalents rose to $63,980, an increase of 17.5% from $54,471 at the end of 2022[4] - As of June 30, 2023, the cash position was $63,980,000, an increase from $52,878,000 at the end of 2022, indicating a stronger liquidity position[7] - Cash provided by operating activities for the six months ended June 30, 2023, was $23,010,000, a notable increase from a cash used of $1,148,000 in the same period of 2022[7] - Cash and restricted cash as of June 30, 2023, totaled $64,714, an increase from $54,941 as of December 31, 2022[72] Inventory and Production - Inventory decreased slightly to $63,164 from $64,221 at the end of 2022, a decline of 1.65%[4] - The company produced 30,558 in V2O5 products for the three months ended June 30, 2023, down from 45,976 in the same period of 2022, representing a decline of 33.4%[92] - Direct mine and production costs for the three months ended June 30, 2023, were $24,976, compared to $23,905 in the same period of 2022, indicating an increase of 4.5%[93] - The company recognized a net realizable value write-down of $683,000 for finished products during the six months ended June 30, 2023, compared to $2,285,000 for the same period in 2022, reflecting improved inventory management[18] Debt and Financing - Long-term debt increased to $47,000, up from $36,000 at the end of 2022, reflecting a rise of 30.6%[4] - Accounts payable increased to $22,518 as of June 30, 2023, from $20,459 at December 31, 2022, marking a rise of 10.2%[27] - Accrued liabilities rose to $4,554 as of June 30, 2023, compared to $3,122 at December 31, 2022, an increase of 46.0%[27] - The company secured a new debt facility of $20,000 in December 2022, with semi-annual principal repayments starting after a grace period of 360 days[32] Shareholder Information - The company recognized a share-based payment expense of $413 for the three months ended June 30, 2023, compared to $491 for the same period in 2022[36] - The balance of issued shares increased to 64,050 as of June 30, 2023, from 64,006 at December 31, 2022, reflecting a slight increase[35] - The company granted 230 RSUs to officers and employees during the three months ended June 30, 2023, which will vest over three years[37] - For the six months ended June 30, 2023, the company granted 424 stock options with a weighted average exercise price of C$6.60, compared to 363 options in the previous year[38] Operational Costs - Operating costs for the six months ended June 30, 2023, were $88,960, an increase of 11.9% from $79,662 in the same period of 2022[57] - Professional, consulting, and management fees for the six months ended June 30, 2023, totaled $11,363, up from $12,296 in the same period of 2022[57] - The company incurred total remuneration of $521,000 for key management personnel during the three months ended June 30, 2023, down from $2,467,000 in the same period of 2022[46] Taxation - The company reported an income tax recovery of $295,000 for the three months ended June 30, 2023, compared to an expense of $7,115,000 in the same period of 2022[43] - The net deferred income tax asset decreased from $4,596,000 at the beginning of the period to $1,428,000 by June 30, 2023[44] - The company reported a deferred income tax expense of $3,203,000 for the six months ended June 30, 2023[44] Market and Strategic Initiatives - Largo Inc. is advancing its renewable energy storage solutions through its vanadium redox flow battery technology (VRFB) and is implementing an ilmenite concentration plant[8] - The company is focused on providing investors with exposure to physical vanadium through Largo Physical Vanadium Corp. (LPV)[8] - The company has committed to purchasing 60 tonnes of V2O5 per month from third parties for the remainder of 2023[65] - The company recognized a provision of R$28,244 ($5,861) related to legal proceedings as of June 30, 2023, an increase from $5,076 at December 31, 2022[69] Foreign Exchange and Other Risks - A 5% change in the value of the Brazilian real relative to the U.S. dollar would affect the value of Brazilian real cash balances by approximately $291 as of June 30, 2023[89] - The company has not experienced any credit losses in the six months ended June 30, 2023, with a loss allowance for trade receivables determined to be $nil[82]