AMG Critical Materials (AMG) Q3 2024 earnings summary

Executive summary

• Q3 2024 EBITDA reached $40 million, supported by strong AMG Technologies performance and a record $367 million order backlog, despite challenging market conditions and depressed lithium and vanadium prices.

• Major lithium projects are nearing completion, with the Brazilian concentrate plant expansion ramping up to 130,000 tons annualized capacity and Europe's first lithium hydroxide refinery in Germany entering commissioning.

• Strategic vertical integration includes LIVA batteries and the completion of the vanadium electrolyte plant in Germany, with the first commercial hybrid energy storage system operational.

• Liquidity remains strong, exceeding $450 million, supported by a $100 million term loan expansion.

• The company maintains a low-cost, diversified portfolio, mitigating risks from market fluctuations.

Financial highlights

• Q3 2024 revenue was $356 million, down 3% year-over-year, with adjusted EBITDA of $40 million, a 44% decline from Q3 2023.

• Net loss attributable to shareholders was $13 million, mainly due to an $18 million pre-tax inventory cost adjustment in the lithium segment.

• Cash used in operating activities was $1.8 million, compared to $25 million generated last year; net debt increased to $490 million.

• SG&A expenses rose to $47 million, up $5 million year-over-year, driven by headcount increases and higher professional fees.

• Gross profit fell 31% year-over-year to $46 million; operating loss was $1.3 million versus a $24 million profit last year.

Outlook and guidance

• 2024 EBITDA guidance raised to exceed $150 million, up from previous guidance to exceed $130 million, driven by strong antimony performance.

• 2025 adjusted EBITDA expected to exceed $130 million, excluding any contribution from the Bitterfeld lithium hydroxide refinery due to ramp-up uncertainties.

• Capital expenditures targeted at $125 million for 2024, dropping to $100 million in 2025 as major projects conclude.

• Five-year guidance targets adjusted EBITDA of $500 million or more, assuming $25,000/MT lithium carbonate equivalent price.

• Antimony profits are expected to normalize in 2025, and guidance reflects cautious assumptions on lithium and vanadium prices.