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Disappointing Q4 results for Albermarle amid high lithium sales

US chemicals company Albemarle Corporation had disappointing results in the fourth quarter of 2021, despite high lithium sales.
Disappointing Q4 results for Albermarle amid high lithium sales Disappointing Q4 results for Albermarle amid high lithium sales Disappointing Q4 results for Albermarle amid high lithium sales Disappointing Q4 results for Albermarle amid high lithium sales Disappointing Q4 results for Albermarle amid high lithium sales

Petra Witowski

The North Carolina-based company recorded a net loss of $3.8 million in the fourth quarter, a drop of $88.4 million from the same quarter in 2020, due to a $132.4 million post-measurement period acquisition purchase price adjustment.

The adjustment was related to anticipated cost overruns from supply chain, labour and COVID-19-related issues at its Kemerton construction project.

Higher prices lifted net sales of lithium to $404.7 million in the fourth quarter, nearly 13% up on the year. A 5% decrease in volumes was related to shipping delays and fairer distribution of customer demand throughout the year.

The increase in lithium sales lifted net sales across the company by 2% to $894 million, with an adjusted EBITDA of $229 million.

Albemarle's CEO, Kent Masters, said the company had delivered strong results in 2021 by executing its strategy and responding effectively to a number of challenges throughout the year.

"With a firm focus on executing our growth strategy, we are well positioned for opportunities to deliver significant value to our shareholders," he said. "The strategic investments we've made in our lithium business, as well as the progress of several key projects, will enable us to potentially double our nameplate capacity by the end of 2022."

Albemarle expected improved results in 2022 relative to full-year 2021 results, with capital expenditures likely to be higher than previously planned due to increased investment in conversion capacity additions.

The outlook for 2022 showed adjusted EBITDA likely to grow by 65-85% year-on-year, with lithium volumes also expected to grow by 20-30% in 2022 due to added capacity from the Chilean La Negra III/IV conversion plant, which is now in commercial qualification, the commissioning of the Australian Kemerton I conversion plant, and the expected acquisition of the Qinzhou plant in China.

On February 16, Albemarle Corp traded on the TSX at C$246/share, nearly 2% higher on the day. Its shares have clawed back some ground after falling to $205 at the end of January.