Eramet (ERA) Q3 2024 TU earnings summary

Executive summary

• Regained full ownership of flagship Centenario lithium asset in Argentina by acquiring Tsingshan's 49.9% stake for $699 million, fully funded by existing liquidity.

• Centenario asset includes 15Mt-LCE resources and a 24kt-LCE battery-grade DLE plant, with long-term production potential above 75kt-LCE.

• Strategic move positions the company for growth in energy transition metals, especially lithium, and provides full control and strategic optionality.

• Major transformation underway, focusing on core mining and metals assets, with a strong balance sheet and high liquidity.

• Battery recycling project in Europe/France suspended due to lack of raw material supply and market demand.

Financial highlights

• Q3 2024 adjusted turnover was €809 million, down 17% year-over-year, mainly due to a 43% drop in volumes, partially offset by a 26% positive price effect.

• Manganese ore sales from Gabon fell 37% year-over-year; nickel ore sales in Indonesia dropped 83% due to permit timing.

• Mineral sands turnover increased 36% to €75m, with record production in Senegal and ilmenite sales up 34%.

• Adjusted nickel turnover fell 59% to €163m, reflecting permit delays and social unrest in New Caledonia.

• Group adjusted turnover for the first nine months was €2,483m, down 14% year-over-year.

Outlook and guidance

• Centenario lithium plant to start production in coming weeks, ramping to 24,000 tons/year by mid-2025.

• Long-term lithium production capacity could exceed 75,000 tons/year; expansion under assessment.

• Adjusted EBITDA for H2 2024 expected to be higher than H1, supported by production and sales targets.

• Capex guidance reduced to €450–500m for 2024, with both current and growth investments cut.

• Revised 2024 volume targets: 6.0–6.5 Mt manganese ore, 32 Mwmt nickel ore in Indonesia, and 1 kt lithium carbonate.