Albemarle Reports First Quarter 2024 Results
CHARLOTTE, N.C.,
First-Quarter
2024 and Recent Highlights
(Unless otherwise stated, all percentage changes represent year-over-year comparisons)
- Net sales of
$1.4 billion , driven by Energy Storage volume growth as projects ramp - Net income of
$2 million , or ($0.08 )(a) per diluted share attributable to common shareholders - Adjusted diluted EPS attributable to common shareholders of
$0.26 - Adjusted EBITDA(b) of
$291 million - On track to deliver more than
$280 million target in productivity benefits in 2024; in Q1, delivered over$90 million in productivity and restructuring cost savings - Conducted successful bidding events for spodumene concentrate and lithium carbonate, designed to promote price transparency and discovery
- Achieved 50% operating rate milestone at Kemerton I; commissioning at Meishan and ramp of the
Salar Yield Improvement Project continue to progress well - Reaffirmed FY 2024 corporate outlook considerations, including ranges based on lithium market price scenarios
(a) |
After mandatory convertible preferred stock dividends |
(b) |
Beginning in 2024, Adjusted EBITDA definition includes |
"In the first quarter, our team demonstrated agility in dynamic market conditions by continuing to deliver solid volumetric growth, ramping new conversion facilities, and executing cost reduction and productivity improvements," said Kent Masters, Albemarle's chairman and CEO. "We have strengthened our competitive position, enhanced our financial flexibility, and started to increase lithium market price transparency. Our actions best position us to serve our core end-markets today and for the future." Masters added, "We remain focused on disciplined capital allocation to deliver profitable organic growth and value for all stakeholders."
2024 Total Corporate Outlook Considerations
The company maintains its prior full-year outlook, which is based on three lithium market price scenarios.
|
Total Corporate FY 2024E Including Energy Storage Scenarios |
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Observed market price case (a) |
YE 2023 |
Q4 2023 average |
H2 2023 average |
Average lithium market price ($/kg LCE) (a) |
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|
|
Net sales |
|
|
|
Adjusted EBITDA (b)(c) |
|
|
|
|
|
(a) |
Price represents blend of relevant |
(b) |
The company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the company is unable to estimate significant non-recurring or unusual items without unreasonable effort. See "Additional Information regarding Non-GAAP Measures" for more information. |
(c) |
Presented under updated adjusted EBITDA definition as of 2024. FY23 adjusted EBITDA under updated definition would be |
2024 Other Corporate Outlook Considerations
Following the company's public offering of depository shares representing an interest in its mandatory convertible preferred stock, interest and financing expenses are expected to be at the low end of the previous range of
|
Other Corporate FY 2024E |
Capital expenditures |
|
Depreciation and amortization |
|
Adjusted effective tax rate |
(5%) - 27% |
Corporate costs |
|
Interest and financing expenses |
|
Weighted-average common shares outstanding (diluted)(d) |
135 - 139 million |
|
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(d) |
Each quarter, |
First Quarter 2024 Results
In millions, except per share amounts |
Q1 2024 |
|
Q1 2023 |
|
$ Change |
|
% Change |
Net sales |
$ 1,360.7 |
|
$ 2,580.3 |
|
$ (1,219.5) |
|
(47.3) % |
Net income attributable to |
$ 2.4 |
|
$ 1,238.6 |
|
$ (1,236.1) |
|
(99.8) % |
Adjusted EBITDA (a)(b) |
$ 291.2 |
|
$ 1,761.7 |
|
$ (1,470.5) |
|
(83.5) % |
Diluted (loss) earnings per share attributable to |
$ (0.08) |
|
$ 10.51 |
|
$ (10.59) |
|
(100.8) % |
Non-recurring and other unusual items (a) |
0.34 |
|
(0.19) |
|
|
|
|
Adjusted diluted earnings per share attributable to |
$ 0.26 |
|
$ 10.32 |
|
$ (10.06) |
|
(97.5) % |
|
|
(a) |
See Non-GAAP Reconciliations for further details. |
(b) |
For comparability, 2023 figures presented under adjusted EBITDA definition that the company adopted beginning in 2024. |
(c) |
Totals may not add due to rounding. |
Net sales for the first quarter of 2024 were
The effective income tax rate for the first quarter of 2024 was 2.2% compared to 23.9% in the same period of 2023. On an adjusted basis, the effective income tax rates were (12.4)% and 23.6% for the first quarter of 2024 and 2023, respectively, with the decrease primarily due to changes in the geographic income mix.
Energy Storage Results
In millions |
Q1 2024 |
|
Q1 2023 |
|
$ Change |
|
% Change |
|
$ 800.9 |
|
$ 1,943.7 |
|
$ (1,142.8) |
|
(58.8) % |
Adjusted EBITDA |
$ 198.0 |
|
$ 1,567.7 |
|
$ (1,369.7) |
|
(87.4) % |
Energy Storage net sales for the first quarter of 2024 were
Specialties Results
In millions |
Q1 2024 |
|
Q1 2023 |
|
$ Change |
|
% Change |
|
$ 316.1 |
|
$ 418.8 |
|
$ (102.7) |
|
(24.5) % |
Adjusted EBITDA |
$ 45.2 |
|
$ 162.2 |
|
$ (117.0) |
|
(72.1) % |
Specialties net sales for the first quarter of 2024 were
Ketjen Results
In millions |
Q1 2024 |
|
Q1 2023 |
|
$ Change |
|
% Change |
|
$ 243.8 |
|
$ 217.8 |
|
$ 26.0 |
|
11.9 % |
Adjusted EBITDA |
$ 22.0 |
|
$ 14.5 |
|
$ 7.4 |
|
51.1 % |
Ketjen net sales of
Cash Flow and Capital Deployment
Cash from operations of
On
Balance Sheet and Liquidity
As of
Earnings Call
Date: |
|
Time: |
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Dial-in ( |
1-800-590-8290 |
Dial-in (International): |
1-240-690-8800 |
Conference ID: |
ALBQ1 |
The company's earnings presentation and supporting material are available on Albemarle's website at https://investors.albemarle.com.
About
Forward-Looking Statements
This press release contains statements concerning our expectations, anticipations and beliefs regarding the future, which constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on assumptions that we have made as of the date hereof and are subject to known and unknown risks and uncertainties, often contain words such as "anticipate," "believe," "estimate," "expect," "guidance," "intend," "may," "outlook," "scenario," "should," "would," and "will". Forward-looking statements may include statements regarding: our 2024 company and segment outlooks, including expected market pricing of lithium and spodumene and other underlying assumptions and outlook considerations; expected capital expenditure amounts and the corresponding impact on cash flow; market pricing of lithium carbonate equivalent and spodumene; anticipated timing of the commissioning of the
Consolidated Statements of Income (In Thousands Except Per Share Amounts) (Unaudited) |
|||
|
|||
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Three Months Ended |
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|
|
||
|
2024 |
|
2023 |
Net sales |
|
|
|
Cost of goods sold |
1,321,798 |
|
1,303,712 |
Gross profit |
38,938 |
|
1,276,540 |
Selling, general and administrative expenses |
194,912 |
|
154,306 |
Research and development expenses |
23,532 |
|
20,471 |
Operating (loss) profit |
(179,506) |
|
1,101,763 |
Interest and financing expenses |
(37,969) |
|
(26,777) |
Other income, net |
49,901 |
|
82,492 |
(Loss) income before income taxes and equity in net income of unconsolidated |
(167,574) |
|
1,157,478 |
Income tax (benefit) expense |
(3,721) |
|
276,963 |
(Loss) income before equity in net income of unconsolidated investments |
(163,853) |
|
880,515 |
Equity in net income of unconsolidated investments (net of tax) |
180,500 |
|
396,188 |
Net income |
16,647 |
|
1,276,703 |
Net income attributable to noncontrolling interests |
(14,199) |
|
(38,123) |
Net income attributable to |
2,448 |
|
1,238,580 |
Mandatory convertible preferred stock dividends |
(11,584) |
|
— |
Net (loss) income attributable to |
$ (9,136) |
|
|
Basic (loss) earnings per share attributable to common shareholders |
$ (0.08) |
|
$ 10.57 |
Diluted (loss) earnings per share attributable to common shareholders |
$ (0.08) |
|
$ 10.51 |
|
|
|
|
Weighted-average common shares outstanding – basic |
117,451 |
|
117,232 |
Weighted-average common shares outstanding – diluted |
117,451 |
|
117,841 |
Condensed Consolidated Balance Sheets (In Thousands) (Unaudited) |
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|||
|
|
|
|
|
2024 |
|
2023 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ 2,055,813 |
|
$ 889,900 |
Trade accounts receivable |
874,038 |
|
1,213,160 |
Other accounts receivable |
438,507 |
|
509,097 |
Inventories |
1,904,827 |
|
2,161,287 |
Other current assets |
549,540 |
|
443,475 |
Total current assets |
5,822,725 |
|
5,216,919 |
Property, plant and equipment |
12,587,763 |
|
12,233,757 |
Less accumulated depreciation and amortization |
2,831,728 |
|
2,738,553 |
Net property, plant and equipment |
9,756,035 |
|
9,495,204 |
Investments |
1,259,001 |
|
1,369,855 |
Other assets |
329,283 |
|
297,087 |
|
1,613,534 |
|
1,629,729 |
Other intangibles, net of amortization |
251,755 |
|
261,858 |
Total assets |
$ 19,032,333 |
|
$ 18,270,652 |
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable to third parties |
$ 1,165,955 |
|
$ 1,537,859 |
Accounts payable to related parties |
129,613 |
|
550,186 |
Accrued expenses |
454,600 |
|
544,835 |
Current portion of long-term debt |
5,076 |
|
625,761 |
Dividends payable |
58,354 |
|
46,666 |
Income taxes payable |
237,098 |
|
255,155 |
Total current liabilities |
2,050,696 |
|
3,560,462 |
Long-term debt |
3,519,453 |
|
3,541,002 |
Postretirement benefits |
26,382 |
|
26,247 |
Pension benefits |
145,067 |
|
150,312 |
Other noncurrent liabilities |
833,548 |
|
769,100 |
Deferred income taxes |
657,468 |
|
558,430 |
Commitments and contingencies |
|
|
|
Equity: |
|
|
|
|
|
|
|
Common stock |
1,175 |
|
1,174 |
Mandatory convertible preferred stock |
2,235,379 |
|
— |
Additional paid-in capital |
2,962,585 |
|
2,952,517 |
Accumulated other comprehensive loss |
(597,205) |
|
(528,526) |
Retained earnings |
6,930,868 |
|
6,987,015 |
|
11,532,802 |
|
9,412,180 |
Noncontrolling interests |
266,917 |
|
252,919 |
Total equity |
11,799,719 |
|
9,665,099 |
Total liabilities and equity |
$ 19,032,333 |
|
$ 18,270,652 |
Selected Consolidated Cash Flow Data (In Thousands) (Unaudited) |
|||
|
|||
|
Three Months Ended
|
||
|
2024 |
|
2023 |
Cash and cash equivalents at beginning of year |
$ 889,900 |
|
$ 1,499,142 |
Cash flows from operating activities: |
|
|
|
Net income |
16,647 |
|
1,276,703 |
Adjustments to reconcile net income to cash flows from operating activities: |
|
|
|
Depreciation and amortization |
123,751 |
|
87,271 |
Stock-based compensation and other |
9,317 |
|
10,540 |
Equity in net income of unconsolidated investments (net of tax) |
(180,500) |
|
(396,188) |
Dividends received from unconsolidated investments and nonmarketable |
50,756 |
|
547,552 |
Pension and postretirement expense |
1,273 |
|
1,954 |
Pension and postretirement contributions |
(4,824) |
|
(2,825) |
Realized loss on investments in marketable securities |
33,746 |
|
— |
Unrealized loss (gain) on investments in marketable securities |
6,737 |
|
(45,732) |
Deferred income taxes |
116,447 |
|
14,098 |
Working capital changes |
(52,320) |
|
(764,071) |
Other, net |
(23,076) |
|
(8,322) |
Net cash provided by operating activities |
97,954 |
|
720,980 |
Cash flows from investing activities: |
|
|
|
Capital expenditures |
(579,322) |
|
(415,608) |
Sales (purchases) of marketable securities, net |
84,893 |
|
(122,267) |
Investments in equity investments and nonmarketable securities |
(74) |
|
(1,133) |
Net cash used in investing activities |
(494,503) |
|
(539,008) |
Cash flows from financing activities: |
|
|
|
Proceeds from issuance of mandatory convertible preferred stock |
2,236,750 |
|
— |
Repayments of long-term debt and credit agreements |
(29,019) |
|
— |
Proceeds from borrowings of long-term debt and credit agreements |
29,019 |
|
— |
Other debt repayments, net |
(620,753) |
|
(713) |
Dividends paid to shareholders |
(46,908) |
|
(46,282) |
Dividends paid to noncontrolling interests |
— |
|
(53,145) |
Proceeds from exercise of stock options |
86 |
|
81 |
Withholding taxes paid on stock-based compensation award distributions |
(10,619) |
|
(18,617) |
Other |
(1,256) |
|
— |
Net cash provided by (used in) financing activities |
1,557,300 |
|
(118,676) |
Net effect of foreign exchange on cash and cash equivalents |
5,162 |
|
24,296 |
Increase in cash and cash equivalents |
1,165,913 |
|
87,592 |
Cash and cash equivalents at end of period |
$ 2,055,813 |
|
$ 1,586,734 |
Consolidated Summary of Segment Results (In Thousands) (Unaudited) |
|
||
|
Three Months Ended |
||
|
|
||
|
2024 |
|
2023 |
Net sales: |
|
|
|
Energy Storage |
$ 800,898 |
|
|
Specialties |
316,065 |
|
418,778 |
Ketjen |
243,773 |
|
217,792 |
Total net sales |
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
Energy Storage |
$ 197,996 |
|
|
Specialties |
45,181 |
|
162,158 |
Ketjen |
21,979 |
|
14,543 |
Total segment adjusted EBITDA |
265,156 |
|
1,744,393 |
Corporate |
26,080 |
|
17,311 |
Total adjusted EBITDA |
$ 291,236 |
|
|
See accompanying non-GAAP reconciliations below.
Additional Information regarding Non-GAAP Measures
It should be noted that adjusted net income attributable to
A description of other non-GAAP financial measures that
Non-GAAP Reconciliations
(Unaudited)
See below for a reconciliation of adjusted net income attributable to
|
Three Months Ended |
||||||
|
|
||||||
|
2024 |
|
2023 |
||||
In thousands, except percentages and per share amounts |
$ |
|
% of |
|
$ |
|
% of |
Net income attributable to |
$ 2,448 |
|
|
|
$ 1,238,580 |
|
|
Add back: |
|
|
|
|
|
|
|
Non-operating pension and OPEB items (net of tax) |
(351) |
|
|
|
374 |
|
|
Non-recurring and other unusual items (net of tax) |
40,044 |
|
|
|
(22,774) |
|
|
Adjusted net income attributable to |
42,141 |
|
|
|
1,216,180 |
|
|
Mandatory convertible preferred stock dividends |
(11,584) |
|
|
|
— |
|
|
Adjusted net income attributable to |
$ 30,557 |
|
|
|
$ 1,216,180 |
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share attributable to common shareholders |
$ 0.26 |
|
|
|
$ 10.32 |
|
|
|
|
|
|
|
|
|
|
Adjusted weighted-average common shares outstanding – diluted |
117,668 |
|
|
|
117,841 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to |
$ 2,448 |
|
0.2 % |
|
$ 1,238,580 |
|
48.0 % |
Add back: |
|
|
|
|
|
|
|
Interest and financing expenses |
37,969 |
|
2.8 % |
|
26,777 |
|
1.0 % |
Income tax (benefit) expense |
(3,721) |
|
(0.3) % |
|
276,963 |
|
10.7 % |
Depreciation and amortization |
123,751 |
|
9.1 % |
|
87,271 |
|
3.4 % |
EBITDA |
160,447 |
|
11.8 % |
|
1,629,591 |
|
63.2 % |
Proportionate share of |
73,689 |
|
5.4 % |
|
165,985 |
|
6.4 % |
Non-operating pension and OPEB items |
(325) |
|
— % |
|
601 |
|
— % |
Non-recurring and other unusual items |
57,425 |
|
4.2 % |
|
(34,473) |
|
(1.3) % |
Adjusted EBITDA |
$ 291,236 |
|
21.4 % |
|
$ 1,761,704 |
|
68.3 % |
|
|
|
|
|
|
|
|
Net sales |
$ 1,360,736 |
|
|
|
$ 2,580,252 |
|
|
Non-operating pension and OPEB items, consisting of mark-to-market actuarial gains/losses, settlements/curtailments, interest cost and expected return on assets, are not allocated to
|
Three Months Ended |
||
|
|
||
|
2024 |
|
2023 |
Interest cost |
$ 8,505 |
|
$ 9,010 |
Expected return on assets |
(8,830) |
|
(8,409) |
Total |
$ (325) |
|
$ 601 |
In addition to the non-operating pension and OPEB items disclosed above, the company has identified certain other items and excluded them from
|
Three Months Ended |
||
|
|
||
|
2024 |
|
2023 |
Restructuring and other charges(1) |
$ 0.23 |
|
$ — |
Acquisition and integration related costs(2) |
0.01 |
|
0.03 |
Loss (gain) in fair value of public equity securities(3) |
0.35 |
|
(0.29) |
Other(4) |
(0.15) |
|
0.04 |
Tax related items(5) |
(0.10) |
|
0.03 |
Total non-recurring and other unusual items |
$ 0.34 |
|
$ (0.19) |
|
|
(1) |
In |
|
|
(2) |
Costs related to the acquisition, integration and divestitures for various significant projects, recorded in Selling, general and administrative expenses for the three months ended |
|
|
(3) |
Loss of |
|
|
(4) |
Other adjustments for the three months ended
|
|
After income taxes, these net gains totaled |
|
|
|
Other adjustments for the three months ended
|
|
After income taxes, these net charges totaled |
|
|
(5) |
Included in Income tax benefit for the three months ended |
|
|
|
Included in Income tax expense for the three months ended |
See below for a reconciliation of the adjusted effective income tax rate, the non-GAAP financial measure, to the effective income tax rate, the most directly comparable financial measure calculated and reported in accordance with GAAP (in thousands, except percentages).
|
Income before |
|
Income tax expense |
|
Effective income tax |
Three months ended |
|
|
|
|
|
As reported |
$ (167,574) |
|
$ (3,721) |
|
2.2 % |
Non-recurring, other unusual and non-operating pension and OPEB |
57,100 |
|
17,407 |
|
|
As adjusted |
$ (110,474) |
|
$ 13,686 |
|
(12.4) % |
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
As reported |
$ 1,157,478 |
|
$ 276,963 |
|
23.9 % |
Non-recurring, other unusual and non-operating pension and OPEB |
(33,872) |
|
(11,472) |
|
|
As adjusted |
$ 1,123,606 |
|
$ 265,491 |
|
23.6 % |
As noted above, beginning in 2024, the company changed its definition of adjusted EBITDA for financial accounting purposes. The updated definition includes Albemarle's share of the pre-tax earnings of the Talison joint venture, whereas the prior definition included
Net income attributable to |
$ 1,573,476 |
Depreciation and amortization |
429,944 |
Interest and financing expenses |
116,072 |
Income tax expense |
430,277 |
Proportionate share of |
779,703 |
Gain on sale of business/interest in properties, net |
(71,190) |
Acquisition and integration related costs |
26,767 |
|
6,765 |
Non-operating pension and OPEB items |
(7,971) |
Mark-to-market gain on public equity securities |
44,732 |
Legal accrual |
218,510 |
Other |
(1,097) |
Total adjusted EBITDA |
$ 3,545,988 |
Contact:
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