Orocobre sees ‘best industry outlook for lithium’ in its history
Lithium producer Orocobre booked a full-year loss of $US89.5m for the full financial year, as the company closed out its merger with Galaxy Resources.
Lithium producer Orocobre has booked a loss of $US89.5m ($123m) for the full financial year, as the company closed out its merger with Galaxy Resources.
Orocobre said the $US805m statutory net loss for the year, which widened from $US67.2m the previous financial year, was largely the result of tax rate changes in Argentina, where its operations are based, and the effects of “inflation and devaluation on deferred tax balances and tax losses”.
Improved lithium prices in the second half of the financial year lifted its revenue 10 per cent to $US84.8m, with losses before interest, tax and foreign currency impacts of $US36.9m, from $US30.7m the previous year.
Orocobre said it booked a total operating loss of $US21.5m for the year, a substantial improvement on the $US77m loss in the previous period – but $US68m worth of tax changes hit its statutory result.
Orocobre managing director Martin Perez de Solay said the company was still running positive operating margins, despite the impact of the coronavirus crisis in Argentina. Total output rose 6 per cent for the year, on 12 per cent lower costs and the company hitting record rates of battery-grade lithium carbonate production of 66 per cent in the final quarter of the year.
About 48 per cent of the company’s output from its Olaroz brine operation in Argentina met battery-grade specifications for the year, up from 24 per cent the previous financial year.
“Importantly, we finish the year with significantly higher prices for our product and the best industry outlook we have seen,” Mr Perez de Solay said.
While concerns linger about whether the global computer chip shortage will hold back growth in the electric vehicle market in the current fiscal year, Orocobre told shareholders the global markets saw a significant growth in the number of vehicles sold last financial year, underpinning a recovery for lithium producers.
“The significant growth in EV sales during the 12-month period of more than five million units, compared to around 2.1 million in the prior year, pushed the market into a supply deficit in 2021 despite some disruption due to Covid-19,” Orocobre said.
“The commitment from governments, original equipment manufacturers, and the energy sector to accelerate the development of the lithium battery supply chain grew firmly during the June quarter.”
Orocobre said it planned to change its name to Allkem following the completion of its merger with WA lithium producer Galaxy Resources.
Orocobre shares lifted 34c, or 3.7 per cent, to $9.52.