AT A GLANCE: Albemarle earnings fall 13% in Q1; expects Covid-19 to hit Q2 figures
A summary of US-based lithium and other specialty chemical producer Albemarle’s financial results for the first quarter of 2020.
- The company’s adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) were down year on year but above previously communicated guidance.
- The fall in net sales was largely attributed to lower volumes in the lithium and catalysts segment, lower lithium contract prices for the first quarter and reduced offtakes due to customers’ excess inventory levels in the fourth quarter of 2019.
- Lithium plants in Chengdu and Xinyu, China, operated at reduced capacity in early 2020 due to Covid-19 restrictions but are now operating to plan.
- There was limited reduction in lithium orders in the quarter but the company expects order cancellations for technical grade lithium products in the second quarter; battery-grade lithium orders will remain solid in the June quarter as battery producers catch up on backlogged orders from before Covid-19 struck.
- Albemarle expects second-quarter performance to be lower year on year due to the economic consequences of the global pandemic.
- It said it had implemented actions to bolster its balance sheet and financial flexibility including cost-saving initiatives.
- The company withdrew its full-year 2020 outlook due to ongoing uncertainty surrounding the economic fallout of Covid-19.
Key figures for Q1 2020
Adjusted Ebitda: $196.4 million (down by 13.1%)
Sales: $738.8 million (down by 11.2%)
Q2 2020 expected sales: $700-775 million
Q2 2020 expected adjusted Ebitda: $140-190 million