Why Allkem Limited's FY23 Full Year Results Deliver a Record Profit of $524.6 Million?

Allkem Limited, an Australian mining and metals company, recently released its financial results for the year ended on June 30, 2023. The company's total annual group revenue reached an all-time high of $1,207. 8 million, which is a 1. 6x increase compared to the previous year’s sales. The excellent market conditions and the company's operational efficiency led to the generation of a gross profit of $1,065. 8 million and a consolidated net profit of $524. 6 million, indicating an increase in growth.

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Operational Highlights

Allkem's Olaroz Lithium Facility recorded a production of 16,703 tonnes, a 30% increase YoY from the previous highest recorded production in FY22. Additionally, the facility's revenue surged by 102% to $592. 2 million on the sales of 13,186 tonnes of lithium carbonate, including $12. 3 million from by-product sales. The gross cash margin also remained strong at 89%. The sale of spodumene concentrate for Mt Cattlin produced 105,291 dmt, generating $513. 7 million from sales and $99. 7 million generated from low-grade sales. The average price of lithium carbonate doubled YoY to $43,981/t FOB, while the gross cash margin remained robust at 78%.

Development Projects

Allkem announced successful progress in its development projects. Olaroz Stage 2 started its wet production in mid-July, and Naraha was able to produce lithium hydroxide while commencing battery-grade qualification with customers. The Olaroz Resource increased by 27% to 20. 7Mt LCE and confirms a considerable potential for expansion. Mt Cattlin's Ore Reserve Update provides an additional 4-5 year mine life until 2027-2028. The company secured EIA approval from the Catamarca government for the 15,000-tonne per annum capacity of Sal de Vida. The company is well on its way to completing the construction of Sal de Vida.

Allkem's total resources at James Bay expanded by 173% to 110. 2 Mt @ 1. 30% Li2O. With a strong balance sheet and two revenue-generating operations, Allkem is now fully funded to continue its expansion plans. The company intends to merge with Livent to create a leading integrated lithium chemicals producer.

Commenting on the full-year results, Allkem’s Managing Director and CEO, Martin Perez de Solay said, “Our strong revenue and EBITDAIX growth and increased production capacity support our strategy to become a global leader in the lithium chemicals industry. "

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