Albemarle improves FY guidance on strong lithium market

24th May 2022 By: Mariaan Webb - Creamer Media Deputy Editor Online

Speciality chemicals group Albemarle on Monday announced an improved full-year 2022 guidance following additional lithium contract renegotiations to more index-referenced, variable-priced contracts.

“Implementation of these contracts is a key driver of the expected year-over-year improvement in our financial results," said CEO Kent Masters.

He reported that the group expected adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) to be up more than 160% this year, on favourable market dynamics for the lithium and bromine businesses.

Albemarle’s previously revised guidance for adjusted Ebitda was $1.7-billion to $2-billion. This has now been increased to a range of $2.2-billion to $2.5-billion.

The company’s lithium-adjusted Ebitda for the full year will grow by about 300% year-on-year, up from the previous outlook.

The average realised pricing is now expected to be up about 140% year-on-year as a result of the implementation of index-referenced, variable-priced contracts and increased market pricing.

Full-year 2022 volume is expected to be up to 20% to 30% year-on-year, mainly owing to new capacity coming online.

The net sales guidance has been increased from the previous range of $5.2-billion to $5.6-billion, to $5.8-billion to $6.2-billion.

Full-year 2022 corporate financial results reflect additional index-referenced, variable-price contracts for battery grade lithium sales. Higher net cash from operations guidance incorporates higher earnings partially offset by increased working capital. Outlook for the Bromine and Catalysts businesses remains unchanged.