Amsterdam, 6 November 2024 (Regulated Information) --- AMG Critical Materials N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reports third quarter 2024 revenue of $356 million, a 3% decrease versus the third quarter of 2023. AMG achieved an adjusted EBITDA of $40 million, supported by an exceptionally strong performance by the AMG Technologies segment showing an increase of 112% compared to the same period in 2023.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “EBITDA continued on a steady growth trend in the third quarter of 2024, during which we achieved $40 million of EBITDA. AMG Technologies delivered a strong performance compared to the third quarter last year with excellent results in a growing market. AMG Engineering secured $131 million in order intake and had a record high order backlog as of September 30, 2024 of $367 million. This result continues to demonstrate the earnings power of our diversified portfolio despite the challenging market conditions and depressed price levels in both AMG Lithium and AMG Vanadium.

In terms of our growth projects, our major lithium capital expenditures are substantially complete. Our Brazilian mine expansion is ramping up and on September 18, 2024, AMG hosted the grand opening of Europe’s first lithium hydroxide refinery in Bitterfeld, Germany. The refinery has finalized construction and has transitioned to commissioning, ramp-up and customer qualification. Both projects strengthen our low-cost position in the lithium market. AMG is approaching the end of a period of significant capital intensity that positions us for strong profitability as market prices improve.

I am also pleased to report that we have significant liquidity. With $272 million in cash on hand and $200 million available under our revolving credit facility, AMG has a total liquidity of $472 million.”

Lithium

  • Our lithium concentrate plant expansion from 90,000 tons to 130,000 tons per year is ramping up and we expect to produce at full 130,000-ton annualized capacity by the end of the fourth quarter of 2024.
  • On September 18, 2024 in Bitterfeld, Germany, AMG hosted the grand opening of Europe’s first lithium hydroxide refinery.

Vanadium

  • Construction of the vanadium electrolyte plant at AMG Titanium in Nuremberg, Germany is complete, and we are producing qualification batches for our customers.
  • SARBV’s “Supercenter” phase 1 project in Saudi Arabia is beginning detailed engineering and permitting. Several licenses and permits have already been obtained, including the Industrial Investment License from the Ministry of Industrial and Mineral Resources.

Technologies

  • AMG Engineering achieved $367 million in order backlog as of September 30, 2024, the highest in AMG’s history. Order intake of $131 million during the third quarter of 2024 was 63% higher than the same period in 2023, driven largely by strong orders of remelting furnaces.
  • AMG LIVA’s first third-party commercial Hybrid Energy Storage System, integrating Lithium-Ion and Vanadium Redox Flow batteries with AI-driven efficiency, is now operational at Wipotec GmbH, enhancing the facility's power system.

Financial Highlights

  • AMG’s liquidity as of September 30, 2024 was $472 million, with $272 million of unrestricted cash and $200 million of revolving credit availability.
  • EBITDA continued on a steady growth trend in the third quarter of 2024, during which AMG achieved $40 million of EBITDA despite significant declines in lithium and vanadium prices.

Key Figures

In 000’s US dollars      
  Q3 ‘24 Q3 ‘23 Change
Revenue $356,003 $368,717         (3%)
Gross profit 46,098 66,803         (31%)
Gross margin         12.9%         18.1%  
       
Operating (loss) profit (1,252) 24,059 N/A
Operating margin         (0.4%)         6.5%  
       
Net (loss) income attributable to shareholders (13,353) 163 N/A
       
EPS - Fully diluted (0.41) 0.00 N/A
       
EBIT (1) 25,408 40,225         (37%)
Adjusted EBITDA (2) 40,266 53,785         (25%)
Adjusted EBITDA margin         11.3%         14.6%  
       
Cash (used in) from operating activities (1,822) 24,926 N/A

Notes:

(1)   EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring, asset impairment, inventory cost adjustments, environmental provisions, exceptional legal expenses, equity-settled share-based payments, strategic expenses, and other exceptional items.(2)   Adjusted EBITDA is defined as EBIT adjusted for depreciation and amortization.

Operational Review

AMG Lithium

  Q3 ‘24 Q3 ‘23 Change
Revenue $48,600 $62,346         (22%)
Gross (loss) profit (781) 26,769 N/A
Operating (loss) profit (12,647) 16,390 N/A
Adjusted EBITDA 10,249 29,638         (65%)

AMG Lithium’s revenue decreased 22% compared to the third quarter of 2023. This variance was largely driven by the 67% decline in lithium market prices versus the third quarter of 2023, offset by a 42% increase in volume.

SG&A expenses of $12 million in the third quarter of 2024 were 16% higher than in the same period last year, mainly driven by the increase in headcount related to the German lithium expansion project and higher professional fees.

The third quarter 2024 adjusted EBITDA decreased 65%, to $10 million, from $30 million in the third quarter of 2023, due to the decline in lithium prices as noted above.

During the third quarter of 2024, a total of 22,731 dry metric tons (“dmt”) of lithium concentrates were sold, 42% higher than the 16,012 dmt in the third quarter of 2023. The average realized sales price was $870/dmt CIF China for the quarter. The average cost per ton for the quarter was $450/dmt CIF China, driven by higher lithium concentrate production, lower costs from the weakening Brazilian Real, and ongoing high tantalum sales volumes which lower the cost of production.

Our lithium concentrate plant is currently ramping to 130,000 tons and shipping volumes were therefore impacted in the third quarter of 2024. We expect to reach design capacity production in the fourth quarter of 2024. AMG is one of the lowest-cost lithium concentrate mines in the world, and we plan to maintain this competitive advantage.

AMG Vanadium

  Q3 ‘24 Q3 ‘23 Change
Revenue $150,972 $174,436         (13%)
Gross profit 11,282 17,182         (34%)
Operating (loss) profit (2,573) 3,539 N/A
Adjusted EBITDA 10,762 15,067         (29%)

AMG Vanadium’s revenue for the third quarter of 2024 decreased by 13%, to $151 million, due primarily to lower sales prices across the segment and lower volumes of ferrovanadium, partially offset by increased volumes in chrome metal.

Gross profit of $11 million in the third quarter of 2024 was 34% lower compared to the same period in 2023, largely due to the decline in revenues noted above.

SG&A expenses in the third quarter of 2024 of $14 million were materially in line with the comparable prior period.

The third quarter of 2024 adjusted EBITDA of $11 million was 29% below the same period in 2023. This was primarily driven by the 21% decrease in market prices for ferrovanadium compared to the third quarter of 2023.

AMG Technologies

  Q3 ‘24 Q3 ‘23 Change
Revenue $156,431 $131,935         19%
Gross profit 35,597 22,852         56%
Operating profit 13,968 4,130         238%
Adjusted EBITDA 19,255 9,080         112%

AMG Technologies' third quarter 2024 revenue increased by $24 million, or 19%, compared to the same period in 2023. This improvement was driven by higher sales volumes of antimony and silicon, and higher sales prices of antimony.

SG&A expenses increased by 13% in the third quarter of 2024 compared to the same period in 2023, due to additional personnel at AMG LIVA and AMG Engineering corresponding to the increased business development, as well as increased professional fees and research and development costs.

AMG Technologies’ adjusted EBITDA was $19 million during the third quarter, more than double the same period in 2023. The increase was primarily due to higher profitability in antimony and graphite.

AMG Engineering signed $131 million in new orders during the third quarter of 2024, representing a 1.82x book to bill ratio. The third quarter 2024 order intake was driven by exceptionally strong orders of remelting furnaces. Order backlog was the highest in AMG’s history at $367 million as of September 30, 2024.

AMG Silicon has been operating two of its four furnaces since March 2024, and we plan to run two furnaces for the remainder of 2024. The operational parameters of the silicon business will continue to be reviewed on an ongoing basis. Due to the noted interruptions in AMG Silicon’s operations, the profitability of the business is immaterial and excluded from adjusted EBITDA during this period of abnormal operations.

Financial Review

Tax

AMG recorded an income tax expense of $2 million in the third quarter of 2024. This expense was mainly due to $7 million of deferred tax expenses in our German businesses related to losses that do not qualify for recognition as deferred tax assets. This expense is offset by the $3 million tax benefit related to the statutory tax rates applied to AMG’s negative profit before tax. In addition, there was a $2 million deferred tax benefit related to a favorable foreign exchange impact on our Brazilian tax positions.

AMG paid taxes of $5 million in the third quarter of 2024, compared to tax payments of $33 million in the third quarter of 2023. The reduced cash payments in the current period were largely a result of the decrease in profitability year-over-year.

Exceptional Items

AMG’s third quarter 2024 gross profit includes exceptional items, which are not included in the calculation of adjusted EBITDA.

A summary of exceptional items included in gross profit in the third quarters of 2024 and 2023 are below:

Exceptional items included in gross profit

  Q3 ‘24 Q3 ‘23 Change
Gross profit $46,098 $66,803         (31%)
Inventory cost adjustment         18,258         7,283         151%
Restructuring expense         102         2,745         (96%)
Silicon’s partial closure         (1,224)         (1,483)         17%
Strategic project expense         441         512         (14%)
Gross profit excluding exceptional items 63,675 75,860         (16%)

AMG had $18 million non-cash expense during the third quarter of 2024 mainly driven by AMG Lithium due to the decline in lithium prices, which has been excluded from the calculation of adjusted EBITDA.

SG&A

AMG’s third quarter 2024 SG&A expenses were $47 million compared to $43 million in the third quarter of 2023. The increase was largely driven by the increase in headcount in our Lithium, Engineering, and LIVA businesses associated with our strategic expansion projects and higher professional fees relating to additional regulatory requirements.

Liquidity

  September 30, 2024 December 31, 2023 Change
Senior secured debt $432,562 $337,402         28%
Cash & cash equivalents 271,599 345,308         (21%)
Senior secured net debt (cash) 160,963         (7,906) N/A
Other debt 11,807 13,105         (10%)
Net debt excluding municipal bond 172,770 5,199 N/A
Municipal bond debt 318,812 319,002         —        %
Restricted cash 1,439 1,451         (1%)
Net debt 490,143 322,750         52%

AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the third quarter. As of September 30, 2024, the Company had $272 million in unrestricted cash and cash equivalents and $200 million available on its revolving credit facility. As such, AMG had $472 million of total liquidity as of September 30, 2024.

Net Finance Costs

AMG’s third quarter 2024 net finance cost was $8 million compared to $9 million in the third quarter of 2023. This is due to higher non-cash intercompany foreign exchange gains compared to the same period in 2023, partially offset by increased interest costs associated with the new $100 million incremental term loan issued in April 2024.

Outlook

Due to the strong operating results to date including exceptional results from our Antimony operation, we are increasing our EBITDA guidance for 2024 from “exceed $130 million EBITDA” to “exceed $150 million EBITDA.”

As the lithium prices have weakened further and AMG Antimony’s contributions normalize, we expect AMG’s adjusted EBITDA to exceed $130 million in 2025. Due to the uncertainty related to the commissioning and ramp-up process as well as the impact of the write-downs in the value of our inventory to the current low market prices, we have excluded any expected contribution from our lithium hydroxide refinery in Bitterfeld, Germany from our 2025 guidance.

(Loss) profit for the period to adjusted EBITDA reconciliation        

  Q3 ‘24 Q3 ‘23
(Loss) profit for the period ($11,708) $1,002
Income tax expense 1,676 12,565
Net finance cost 7,813 9,295
Equity-settled share-based payment transactions 1,524 1,392
Restructuring expense 102 2,745
Silicon’s partial closure (346) (739)
Inventory cost adjustment 18,258 7,283
Strategic project expense (1) 7,127 5,301
Share of loss of associates 967 1,197
Others (5) 184
EBIT 25,408 40,225
Depreciation and amortization 14,818 13,560
Adjusted EBITDA 40,226 53,785

Notes:(1)   The Company is in the initial development and ramp-up phases for several strategic expansion projects, including the joint venture with Shell, the LIVA Battery System, and the lithium expansion in Germany, which incurred project expenses during the quarter but are not yet operational. AMG is adjusting EBITDA for these exceptional charges.

AMG Critical Materials N.V.    
Condensed Interim Consolidated Income Statement    
For the quarter ended September 30    
In thousands of US dollars 2024 2023
  Unaudited Unaudited
Continuing operations    
Revenue         356,003         368,717
Cost of sales         (309,905)         (301,914)
Gross profit         46,098         66,803
     
Selling, general and administrative expenses         (47,446)         (42,800)
     
Other income, net         96         56
Net other operating income         96         56
     
Operating (loss) profit         (1,252)         24,059
     
Finance income         5,160         5,676
Finance cost         (12,973)         (14,971)
Net finance cost         (7,813)         (9,295)
     
Share of loss of associates and joint ventures         (967)         (1,197)
     
(Loss) profit before income tax         (10,032)         13,567
     
Income tax expense         (1,676)         (12,565)
     
(Loss) profit for the period         (11,708)         1,002
     
(Loss) profit attributable to:    
Shareholders of the Company         (13,353)         163
Non-controlling interests         1,645         839
(Loss) profit for the period         (11,708)         1,002
     
(Loss) earnings per share    
Basic (loss) earnings per share         (0.41) 0.01
Diluted (loss) earnings per share         (0.41) 0.00
 
AMG Critical Materials N.V.    
Condensed Interim Consolidated Income Statement    
     
For the nine months ended September 30    
In thousands of US dollars 2024 2023
  Unaudited Unaudited
Continuing operations    
Revenue         1,078,473         1,258,626
Cost of sales         (929,717)         (924,447)
Gross profit         148,756         334,179
     
Selling, general and administrative expenses         (137,234)         (132,580)
     
Other income, net         236         650
Net other operating income         236         650
     
Operating profit         11,758         202,249
     
Finance income         15,127         14,843
Finance cost         (45,010)         (38,037)
Net finance cost         (29,883)         (23,194)
     
Share of loss of associates and joint ventures         (2,706)         (2,989)
     
(Loss) profit before income tax         (20,831)         176,066
     
Income tax expense         (15,504)         (75,044)
     
(Loss) profit for the period         (36,335)         101,022
     
(Loss) profit attributable to:    
Shareholders of the Company         (40,615)         99,147
Non-controlling interests         4,280         1,875
(Loss) Profit for the period         (36,335)         101,022
     
(Loss) earnings per share    
Basic (loss) earnings per share         (1.26)         3.08
Diluted (loss) earnings per share         (1.26)         3.04
AMG Critical Materials N.V.    
Condensed Interim Consolidated Statement of Financial Position  
     
In thousands of US dollars September 30, 2024 Unaudited December 31, 2023
Assets    
Property, plant and equipment 970,058 921,178
Goodwill and other intangible assets 53,735 40,313
Derivative financial instruments 11,940 22,847
Equity-accounted investees 38,173         18,266
Other investments 44,766 38,160
Deferred tax assets 33,579 26,882
Restricted cash 391 387
Other assets 14,580 12,060
Total non-current assets         1,167,222         1,080,093
Inventories         318,135         260,945
Derivative financial instruments         3,388         3,397
Trade and other receivables         199,801         164,027
Other assets         90,899         100,128
Current tax assets         6,774         7,845
Restricted cash         1,048         1,064
Cash and cash equivalents         271,599         345,308
Total current assets         891,644         882,714
Total assets         2,058,866         1,962,807
AMG Critical Materials N.V.    
Condensed Interim Consolidated Statement of Financial Position  
(continued)    
     
In thousands of US dollars September 30, 2024 Unaudited December 31, 2023
Equity    
Issued capital         853         853
Share premium         553,715         553,715
Treasury shares         (9,558)         (10,593)
Other reserves         (45,484)         (52,269)
Retained earnings         17,605         70,077
Equity attributable to shareholders of the Company         517,131         561,783
     
Non-controlling interests         48,265         44,220
Total equity         565,396         606,003
     
Liabilities    
Loans and borrowings         749,228         656,265
Lease liabilities         46,003         46,629
Employee benefits         130,072         133,333
Provisions         17,560         17,951
Deferred revenue         10,138         17,836
Other liabilities         6,325         4,784
Derivative financial instruments         —         27
Deferred tax liabilities         13,041         6,664
Total non-current liabilities         972,367         883,489
Loans and borrowings         5,696         5,566
Lease liabilities         5,675         5,725
Short-term bank debt         8,257         7,678
Deferred revenue         16,228         14,083
Other liabilities         89,134         77,052
Trade and other payables         243,997         259,339
Derivative financial instruments         2,582         2,828
Advance payments from customers         121,221         60,561
Current tax liability         20,572         24,279
Provisions         7,741         16,204
Total current liabilities         521,103         473,315
Total liabilities         1,493,470         1,356,804
Total equity and liabilities         2,058,866         1,962,807
AMG Critical Materials N.V.    
Condensed Interim Consolidated Statement of Cash Flows    
For the nine months ended September 30    
In thousands of US dollars 2024 2023
  Unaudited Unaudited
Cash (used in) from operating activities    
(Loss) profit for the period         (36,335)         101,022
Adjustments to reconcile net profit to net cash flows:    
Non-cash:    
Income tax expense         15,504         75,044
Depreciation and amortization         42,977         40,200
Asset impairment reversal         —         (767)
Net finance cost         29,883         23,194
Share of loss of associates and joint ventures         2,706         2,989
Loss on sale or disposal of property, plant and equipment         158         33
Equity-settled share-based payment transactions         4,563         4,356
Movement in provisions, pensions, and government grants         (8,776)         8,470
Working capital, deferred revenue adjustments, and other         (32,731)         31,609
Cash generated from operating activities         17,949         286,150
Finance costs paid, net         (27,291)         (19,163)
Income tax paid         (16,669)         (88,691)
Net cash (used in) from operating activities         (26,011)         178,296
     
Cash used in investing activities    
Proceeds from sale of property, plant and equipment         28         34
Acquisition of property, plant and equipment and intangibles         (85,448)         (109,540)
Investments in associates and joint ventures         (22,613)         (19,939)
Use of restricted cash         12         5,492
Interest received on restricted cash         —         30
Capitalized borrowing cost paid         (11,584)         (11,583)
Other         (20)         4
Net cash used in investing activities         (119,625)         (135,502)
AMG Critical Materials N.V.    
Condensed Interim Consolidated Statement of Cash Flows    
(continued)    
For the nine months ended September 30    
In thousands of US dollars 2024 2023
  Unaudited Unaudited
Cash from (used in) financing activities    
Proceeds from issuance of debt         100,000         57
Payment of transaction costs related to debt         (2,483)         —
Repayment of loans and borrowings         (4,381)         (14,355)
Net repurchase of common shares         (688)         (6,960)
Dividends paid         (15,072)         (28,212)
Payment of lease liabilities         (4,835)         (4,098)
Contributions by non-controlling interests         —         14,000
Net cash from (used in) financing activities         72,541         (39,568)
     
Net (decrease) increase in cash and cash equivalents         (73,095)         3,226
     
Cash and cash equivalents at January 1         345,308         346,043
Effect of exchange rate fluctuations on cash held         (614)         (1,976)
Cash and cash equivalents at September 30         271,599         347,293

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

About AMG

AMG's mission is to provide critical materials and related process technologies to advance a less carbon-intensive world. To this end, AMG is focused on the production and development of energy storage materials such as lithium, vanadium, and tantalum. In addition, AMG's products include highly engineered systems to reduce CO2 in aerospace engines, as well as critical materials addressing CO2 reduction in a variety of other end use markets.

AMG’s Lithium segment spans the lithium value chain, reducing the CO2 footprint of both suppliers and customers. AMG’s Vanadium segment is the world’s market leader in recycling vanadium from oil refining residues, spanning the Company’s vanadium, titanium, and chrome businesses. AMG’s Technologies segment is the established world market leader in advanced metallurgy and provides equipment engineering to the aerospace engine sector globally. It serves as the engineering home for the Company’s fast-growing LIVA batteries, and spans AMG’s mineral processing operations in graphite, antimony, and silicon metal.

With approximately 3,600 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, and Sri Lanka, and has sales and customer service offices in Japan (www.amg-nv.com).

For further information, please contact:AMG Critical Materials N.V.        +1 610 975 4979Michele Fischermfischer@amg-nv.com

Disclaimer

Certain statements in this press release are not historical facts and are “forward looking.” Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These forward-looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG's expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.

Attachment

  • Third Quarter 2024 Earning Press Release
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