Arcadium Lithium eyes four-fold production expansion
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The news: ASX-listed Arcadium Lithium reported its first quarter as a combined company, following the merger of Argentine lithium producer Allkem and its US peer Livent, and set its sights on a four-fold production increase by 2026.
The numbers: Arcadium posted first-quarter revenue of USD261 million ($397.14) and adjusted EBITDA of USD108.8 million. In the prior corresponding period, the merged company's predecessor Livent reported revenue of USD254 million and adjusted EBITDA of USD157.4 million.
The miner said it remained on track to realised synergy and cost savings of between USD60 million and USD80 million in 2024, with most of those savings expected to be realised in the remaining three quarters of the year.
Arcadium noted that it had taken steps to lower costs, including reducing its global workforce by around 11% during the quarter.
It also expected to increase its total production capacity to 170,000 lithium carbonate equivalent, or over four times its production capacity in 2023.
Arcadium shares were up 1% to $7.22 by midday AEST.
The context: Arcadium said it saw "encouraging signs" in the lithium market and underlying demand fundamentals remained "very strong".
While combined volumes were down compared to the previous quarter, driven by a decline in spodumene sales due to lower production at the company's Mount Cattlin mine, an improvement in lithium market conditions saw prices lift slightly higher across most lithium products.
Following the merger, Arcadium now holds combined assets in Argentina and Canada, with a focus on capitalising on lithium demand for electric cars and new forms of energy storage.
What they said: Arcadium president and CEO Paul Graves said: "Arcadium Lithium completed its first quarter as a combined company following merger close in early 2024 and we have taken initial steps that will allow us to deliver on the significant value of the combination".
The source: ASX announcement
