Albemarle (ALB) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $1.4–$1.43 billion, down 40% year-over-year due to lower lithium pricing, partially offset by 37% volume growth in Energy Storage as new capacity ramped up.

• Net loss attributable to shareholders was $188 million, or $(1.96) per diluted share, including a $215 million after-tax charge for asset write-offs and contract cancellations.

• Adjusted EBITDA was $375–$386 million, down 69–70% year-over-year but up sequentially, driven by higher Talison JV sales and productivity actions.

• Over $150 million in productivity and restructuring benefits delivered in Q2, with a comprehensive cost and operating review underway, including immediate changes at Kemerton.

• Announced further restructuring in July 2024, including stopping construction of Kemerton Train 3, placing Train 2 into care and maintenance, and expecting a Q3 2024 charge of $0.9–$1.1 billion.

Financial highlights

• Net sales declined to $1.4–$1.43 billion from $2.4 billion in Q2 2023, primarily due to a 53% drop in Energy Storage sales from lower pricing.

• Adjusted diluted EPS was $0.04; adjusted EBITDA margin was 26.2–27% in Q2 2024.

• Cash from operations reached $362.9–$363 million, up $289 million year-over-year, with operating cash conversion at 94%.

• Available liquidity at quarter-end was $3.5 billion, including $1.8 billion in cash and $1.5 billion undrawn revolver.

• Net debt to adjusted EBITDA was 2.1x, well below covenant maximums.

Outlook and guidance

• Full-year 2024 outlook maintained, with net sales expected at $5.5–$6.8 billion and adjusted EBITDA at $0.9–$1.8 billion, assuming $15/kg lithium price scenario.

• Energy Storage volumes projected to increase 10–20% year-over-year in 2024; sequential growth expected to moderate in the second half.

• CapEx for 2024 expected at the high end of $1.7–$1.8 billion, with further reductions under evaluation.

• Specialties adjusted EBITDA outlook reduced due to higher logistics and raw material costs and slower market rebound.

• Additional restructuring actions may be required if lithium prices remain low for an extended period.