Financial Data and Key Metrics Changes - Livent reported second quarter revenue of $236 million, adjusted EBITDA of $135 million, and adjusted earnings of $0.51 per diluted share, all significantly up from the second quarter of 2022 but lower than the record set in the first quarter of 2023 [12][13] - The company reiterated its full year 2023 financial guidance, projecting adjusted EBITDA between $530 million and $600 million, indicating a substantial improvement compared to 2022 [7][19] Business Line Data and Key Metrics Changes - Volumes sold were roughly flat compared to the first quarter, but average realized prices were slightly lower, and overall costs were higher, primarily due to increased royalty payments and higher input costs [13][15] - Livent's total capital spend year-to-date was $156 million, with expectations to increase in the second half of the year as multiple expansions progress [16] Market Data and Key Metrics Changes - The lithium market has seen a decline in prices from historic highs, with a floor likely set above $30 per kilo in China, expected to remain stable through the rest of the year and into 2024 [27][29] - Approximately 70% of Livent's 2023 volumes have fixed prices set prior to the fourth quarter of the previous year, providing confidence in a 40% average expected price increase across these volumes [25] Company Strategy and Development Direction - Livent is advancing its integrated 34,000 metric ton lithium hydroxide project at Nemaska Lithium, with first sales expected in 2025 [8][36] - The company announced a proposed merger with Allkem to create a leading global lithium chemicals producer, enhancing scale and vertical integration [10][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving meaningful average realized price improvements in 2023 compared to 2022, despite anticipated higher costs [20][26] - The company expects the second half of 2023 financial performance to be broadly similar to the first half, with total volumes expected to be higher due to initial phases of expansion coming online [21][22] Other Important Information - A fire at Livent's manufacturing facility in Bessemer City, North Carolina, was contained with no injuries reported, and operations resumed within two days [30][31] - Livent published its annual Sustainability Report for 2022, highlighting its commitment to responsible production and environmental stewardship [49] Q&A Session Summary Question: Update on Salar del Hombre volumes in guidance - Management indicated that the expected contribution is closer to 3,000 tons rather than 4,000 tons for the year due to complexities in starting operations [52][53] Question: Clarification on financing for Nemaska - Financing will come from customer cash advances, government funding, third-party debt financing, and equity contributions from Livent and Investissement Québec [55][56] Question: Projections for 2024 EBITDA - The $1 billion EBITDA projection for 2024 is based on realistic estimates of production and pricing, not an idealized scenario [98][100] Question: Fixed price contracts for lithium hydroxide - About 70% of lithium hydroxide for 2023 is contracted at fixed prices, with discussions ongoing for 2024 pricing [91] Question: Capital expenditure plans beyond this year - Capital spending is expected to trend upwards in Argentina due to ongoing expansions, with overall spending likely to be slightly higher than in 2022 and 2023 [92][93]
Arcadium Lithium plc(ALTM) - 2023 Q2 - Earnings Call Transcript