Sigma Lithium (SGML) Q2 2024 earnings summary

Executive summary

• Achieved operational excellence in 2Q24, increasing shipment cadence to 22,000 tons every 30-35 days and maintaining reliability as a producer.

• Maintained a 10% price premium over peers, with a 2Q24 average realized price of $1,184/t (CIF 6% basis), and diversified sales to Japan, South Korea, and China.

• Surpassed industry safety standards with zero fatalities or accidents for one year, ranking second globally in ICMM ratings.

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

• Consistently shipped 52,572 tonnes in 2Q24, with guidance of 60,000 tonnes for 3Q24.

Financial highlights

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

• FOB cash operating margins reached 54%, and adjusted cash EBITDA margin was 29%.

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

• SG&A expenses reduced by 24% from H2 2023, supporting a robust cash model.

• Ended Q2 with $75.3 million in cash, rebounding to $99 million by August 14, 2024.

Outlook and guidance

• Targeting 60,000 tonnes of sales for Q3 2024, with further cost reductions expected from operational improvements.

• Phase 2 expansion underway, targeting an additional 250,000 tonnes annual capacity and commercial production in 1Q25, with $100 million capex.

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

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