Arcadium Lithium (ALTM) Q4 2023 earnings summary

Executive summary

• All-stock merger of equals between Allkem and Livent closed Jan. 4, 2024, following shareholder approvals.

• Combined calendar-year 2023 pro forma revenue was $2.0 billion.

• 2024 priorities include ~40% higher lithium carbonate and hydroxide volumes, $60–80 million in synergies, and moderated expansion spending.

Financial highlights

• Livent FY2023 revenue was $883 million, up 9% YoY; GAAP net income was $330 million, up 21%, and adjusted EBITDA was $503 million, up 37%.

• Livent Q4 2023 revenue was $182 million, down 14% QoQ and 17% YoY; GAAP net income was $38 million, down 57% QoQ and 54% YoY.

• Q4 adjusted EBITDA was $91 million, down 24% QoQ and 16% YoY; GAAP EPS was $0.18 and adjusted EPS was $0.34.

• FY2023 GAAP diluted EPS was $1.58 versus $1.36; adjusted EPS was $1.89 versus $1.40.

• FY2023 adjusted cash from operations was $326 million; capital spending was $329 million versus $327 million in 2022.

Outlook and guidance

• 2024 lithium carbonate and hydroxide volumes are expected to rise ~40% to 50,000–54,000 metric tons LCE; sales outlook lists 24–26k LCE tons hydroxide and 25–28k carbonate.

• 2024 sales outlook is 52–57k LCE tons excluding spodumene and 69–73k including spodumene, versus 66k total LCE tons in 2023; spodumene sales are expected to be lower.

• 2024 capital guidance is $450–625 million for growth plus $100–125 million for maintenance.

• 2024 synergies and cost savings of $60–80 million are primarily expected from lower SG&A, headcount reductions and removal of overlapping services.

• At $15/kg LCE, revenue is ~ $1.25 billion and adjusted EBITDA is -$420 million; at $25/kg, revenue is ~ $1.9 billion and adjusted EBITDA is ~ $1.0 billion. Scenarios are not price forecasts.