Highlights:
- During early trading hours on Wednesday, Allkem share price dropped by 3.88%.
- Allkem has delivered record group revenue of US$337 million during the June quarter.
- The lithium producer expects spodumene concentrate pricing to remain higher in September quarter than in June.
Lithium producer, Allkem Ltd (ASX:AKE) on Wednesday (20 July 2022) has shared the June quarterly activities report. The company has achieved record revenue in the June quarter. Moreover, Allkem reported record production of spodumene concentrate in FY22 at its Mt Cattlin mine.
Despite delivering record revenue during the quarter, the shares of Allkem were spotted trading 3.88% down from its previous close to AU$9.40 per share at 10:57 AM AEST. Allkem shares underperformed its benchmark index, ASX 200 Materials which was up by 2.02% around the same time.
Meanwhile, ASX 200 gained 101.50 points to 6,751.10.
Key highlights of the June 2022 quarterly activities According to today’s release, Allkem’s Mt Cattlin has delivered record spodumene concentrate production of 193,563 DMT (dry metric tonnes) in the financial year 2022 (FY22). In the June quarter, Mt Cattlin reported spodumene concentrate production of 24,845 dmt.
In three months, the company shipped 37,837 dmt of spodumene concentrate, generating US$188.9 million in revenue. The revenue is realised at an average sales price of US$4,992 /dmt CIF.
At the Olaroz Lithium Facility, record 12,863 tonnes of lithium carbonate in annual production were achieved. 47% of the total produce was battery-grade material. In the June quarter, the company recorded 3,440 tonnes of lithium carbonate sales, generating revenue of US$141 million at an average price of US$41,033/tonnes FOB (Free on Board).
High sales price accompanied by strong operating performance; the group delivered record revenue of around US$337 million during the quarter. The company recorded circa US$292 million of gross operating cash margin.
For FY22, group revenue of US$762 million was recorded. As of 30 June 2022, the company had US$663.2 million in cash. The strong cash balance is expected to assist Allkem in delivering its growth strategy to expand the group production threefold by 2026.
Allkem said that three new senior executives had been appointed, and they would support in delivering its growth strategy.
Outlook shared by Allkem In FY23, the company expects to produce around 160 – 170 ktpa (Kilo-tonnes per annum) of spodumene.
Allkem said that the spodumene market is witnessing robust customer demand, and it expects spodumene concentrate pricing to be higher in September than in June.
Costs are expected to remain higher due to the Covid-19 impact in Western Australia and increased competition for skilled labour. Companies are introducing workforce retention programs to handle employee turnover.
The company expects the lithium carbonate pricing in the September quarter to be similar to the June quarter.
Reportedly, the group is entering the growth period as Naraha and Olaroz Stage 2 production will begin this year. Production would commence at Sal de Vida in 2023 and James Bay in 2024.