Sigma Lithium (SGML) Q2 2024 earnings summary

Executive summary

• Achieved operational excellence and efficiency, shipping 52,572 tons of high-purity lithium concentrate in 2Q24 and establishing a reliable 22,000-ton shipment cadence, with guidance for 60,000 tons in 3Q24.

• Maintained a 10% price premium over peers, with a 2Q24 average realized price of $1,184/t (CIF 6% basis), and diversified commercial relationships across Asia.

• Achieved top global safety standards with zero fatalities or accidents over the past year, ranking near the top in ICMM ratings.

• Transitioned from a construction site to an industry leader, meeting all operational and cost guidance ahead of schedule.

• Implemented operational improvements at the Greentech Plant, boosting yields and efficiency.

Financial highlights

• Reported Q2 2024 revenues of $45.9 million on 52,572 tons sold, with a realized price of $894/ton.

• Adjusted cash EBITDA reached $13.3 million (29% margin), with gross profit of $16.2 million and net loss of $10.8 million, mainly due to $14.6 million in non-operating currency adjustments.

• FOB cash operating margin was 54%, among the highest in the sector.

• Achieved unit cash cost guidance ahead of schedule: CIF $510/ton, FOB $420/ton, plant gate $364/ton, representing a 22% reduction from Q4 levels.

• Cash balance increased from $75.3 million at quarter-end to $99 million by August, with $45 million in receivables collected post-quarter.

Outlook and guidance

• Targeting 60,000 tons of sales for Q3 2024, with robust guidance based on operational improvements and dynamic pricing.

• Disciplined approach to capacity expansion: one production line per year, aiming for 100,000 tons LCE by 2026 and doubling production to 520,000 tpa by 2025.

• Phase 2 Greentech Plant expansion underway, targeting an additional 250,000 tpa capacity within 12 months, with commercial production expected in 1Q25.

• Confident in maintaining profitability and cost leadership even in a challenging lithium price environment.