Amsterdam, 22December 2022(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) announces strategic partnership between AMG Brasil SA, JX Nippon Mining & Metals Corporation (“JXNMM”) and TANIOBIS GmbH for the production and supply of tantalum concentrate from AMG’s Mibra Mine located in the state of Minas Gerais in Brazil. JXNMM will invest in the expansion of tantalum concentrate production that is occurring in combination with AMG’s already announced expansion of spodumene capacity. All tantalum pre-concentrate will be processed at Mibra Mine and subsequently sold to TANIOBIS.
This partnership achieves greater vertical integration in tantalum for JXNMM and provides long-term stability in tantalum sales and corresponding by-product credits to lithium production costs for AMG Brasil.
“This agreement strengthens and builds upon the long-standing relationship between AMG Brasil, a renowned producer of conflict-free tantalum ore, and TANIOBIS, a global leading supplier of high-quality tantalum powders. I am excited to partner with JX Nippon Mining and Metals, and I believe this is the first step in the development of other mutually beneficial opportunities,” said Fabiano Costa, President of AMG Brasil SA.
“This partnership in tantalum business will further contribute a stable supply of advanced materials to the market with a transparent supply chain, as well as strengthen the partners’ integral business relationship in tantalum value chain,” said Nobuharu Masaki, Executive Officer, General Manager of Mineral Resources Division of JXNMM.
“Through our strong partnership among AMG Brasil, JXNMM, and TANIOBIS, we can fulfil our mission to enhance the stable supply of tantalum to the market. At the same time, we believe we can develop our overall tantalum relevant market with the steady growth in order to serve for the better world. I am really excited to go for our joint journey together with a great partner such as AMG Brasil,” said Kazuyuki Marukawa, Vice Chairman of TANIOBIS GmbH.
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
About AMG
AMG is a global critical materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.
AMG Clean Energy Materials segment combines AMG’s recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. AMG Clean Energy Materials segment spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies segment combines AMG’s leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals segment consists of AMG’s mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka, and Mozambique, and has sales and customer service offices in Japan (www.amg-nv.com).
For further information, please contact: AMG Advanced Metallurgical Group N.V.+1 6109754979 Michele Fischer mfischer@amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are “forward looking.” Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These forward-looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.
Amsterdam, 2 November 2022(Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”), a global critical materials company at the forefront of CO2 reduction trends, reported third quarter 2022 revenue of $425 million, a 36% increase versus the third quarter of 2021. Third quarter 2022 EBITDA of $103 million was the highest in AMG’s history, and a 210% increase versus the third quarter of 2021.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “This outstanding result was largely driven by AMG Lithium. The continued strength in both lithium demand and our low-cost position led to improved profitability in AMG Lithium in Brazil. The mission of AMG Lithium is to be the number one producer of electric vehicle battery materials in Europe by expanding production of battery-grade hydroxide, vertically integrating its Brazilian spodumene production and pursuing additional mineral resources.”
Outlook
Given the strong performance to date and the visibility into year end, AMG is increasing its EBITDA guidance for the full year 2022 to $320 million or higher, from a previous range of between $280 million and $300 million.
Important parameters for 2023 guidance are first and foremost the startup of the expanded production of lithium concentrate in Brazil in the second half of 2023; the market conditions primarily in lithium; and the ramp-up of the Zanesville refinery to full production. In view of this, AMG’s EBITDA guidance for 2023 is to exceed $400 million. It is important to note that since the increase of spodumene production will occur in the latter half of the year, 2023 EBITDA development will be back-end weighted.
Strategic Highlights
Lithium
The project to expand the spodumene production in AMG Brazil is under construction. The objective is to be at full capacity in the second half of 2023.
The AMG Lithium refinery in Bitterfeld, Germany, Europe’s first lithium hydroxide refinery, is under construction, and commissioning for the first 20,000-ton module of the battery-grade lithium hydroxide upgrader will commence in the fourth quarter of 2023.
AMG Lithium’s battery-grade hydroxide refinery has signed a binding supply agreement with EcoPro, a leading South Korean cathode paste producer, for an initial three-year term to deliver a minimum of 5,000 tons per annum of battery-grade lithium hydroxide to EcoPro’s cathode materials production plant in Debrecen, Hungary.
AMG has negotiated a strategic tolling contract for our spodumene production as well as third-party spodumene to supply technical-grade hydroxide to Bitterfeld.
AMG has consolidated its lithium value chain under one legal entity and is currently aligning its lithium management and governance structures to further increase the long-term value of its lithium activities. Accordingly, we are preparing a re-segmentation of AMG to be approved by the Supervisory Board in December and become effective on January 1, 2023.
Vanadium
The new vanadium spent catalyst recycling facility in Zanesville, Ohio, which started operating on October 29, 2022, is a clear manifestation of AMG’s industry leadership in the recycling of hazardous refinery waste globally. We are extremely pleased about the successful startup of both the roaster and the melt shop, and we expect the ramp-up to full production to take between three to four months.
Shell & AMG Recycling B.V. (“SARBV”) and its partner, the United Company for Industry (“UCI”), continue to advance the first project of the Supercenter in conjunction with Saudi Arabian Oil Company (“Aramco”). Plant design optimization, site selection and permitting activities are progressing and the FEL3 partnering with Hatch is expected to begin later this month. The SARBV-UCI-Aramco consortium are also developing a pipeline of projects which will conclude with the deployment of AMG’s LIVA Hybrid Energy Storage System technology.
AMG’s innovative lithium vanadium battery (“LIVA”) for industrial power management applications has successfully started up at our plant in Hauzenberg, Germany.
Financial Highlights
Revenue increased by 36% to $425 million in the third quarter of 2022 from $312 million in the third quarter of 2021.
EBITDA was a record $103 million in the third quarter of 2022, up 210% versus the third quarter 2021 EBITDA of $33 million.
Annualized return on capital employed was 29.5% for the first nine months of 2022, more than double the 10.4% for the same period in 2021.
Cash flow from operations was $75 million for the third quarter 2022, driven by the high profitability of AMG Lithium in Brazil.
Net income attributable to shareholders for the third quarter of 2022 was $68 million, yielding $2.09 diluted earnings per share, compared to $0.02 diluted loss per share in the third quarter of 2021.
AMG’s liquidity as of September 30, 2022 was $489 million, with $306 million of unrestricted cash and $183 million of revolving credit availability.
Key Figures
In 000’s US dollars
Q3 ‘22
Q3 ‘21
Change
Revenue
$424,813
$311,946
36%
Gross profit
112,071
51,083
119%
Gross margin
26.4%
16.4%
Operating profit
121,680
17,346
601%
Operating margin
28.6%
5.6%
Net income (loss) attributable to shareholders
68,146
(599)
N/A
EPS – Fully diluted
2.09
(0.02)
N/A
EBIT (1)
91,536
22,475
307%
EBITDA (2)
102,603
33,051
210%
EBITDA margin
24.2%
10.6%
Cash from operating activities
74,747
17,635
324%
Notes:
(1) EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring, asset impairment, inventory cost adjustments, environmental provisions, exceptional legal expenses and other exceptional items, equity-settled share-based payments, and strategic expenses.
(2) EBITDA is defined as EBIT adjusted for depreciation and amortization.
Operational Review
AMG Clean Energy Materials
Q3 ‘22
Q3 ‘21
Change
Revenue
$188,318
$105,308
79%
Gross profit
86,454
20,120
330%
Gross profit before non-recurring items
87,710
21,721
304%
Operating profit
74,888
9,985
650%
EBITDA
83,674
18,029
364%
AMG Clean Energy Materials’ revenue increased 79% compared to the third quarter of 2021, to $188 million, driven mainly by higher prices in vanadium, tantalum and lithium concentrates, as well as increased sales volumes of lithium concentrate. Sales volumes were up due to shipping schedule variances from AMG Brazil. This increase in the third quarter of 2022 includes a catch up from the second quarter as well as additional volumes that shipped in the third quarter that were planned for the fourth quarter.
Gross profit before non-recurring items for the quarter increased 304% compared to the same period in the prior year, primarily due to the increased price environment.
SG&A expenses in the third quarter of 2022 were $12 million, 15% higher than the third quarter of 2021, largely due to strategic project costs and higher variable compensation expense in the current quarter.
The third quarter 2022 EBITDA increased 364%, to $84 million, from $18 million in the third quarter of 2021, due to the improved gross profit as noted above.
AMG Critical Minerals
Q3 ‘22
Q3 ‘21
Change
Revenue
$84,935
$79,392
7%
Gross profit
674
10,660
(94%)
Gross profit before non-recurring items
12,210
10,843
13%
Operating profit
40,301
4,028
901%
EBITDA
7,327
6,509
13%
AMG Critical Minerals’ revenue increased by $6 million, or 7%, to $85 million, driven by higher sales prices in all three businesses.
Gross profit before non-recurring items of $12 million in the third quarter was 13% higher compared to the third quarter of 2021. The higher revenue was due to the improved price environment, partially offset by increased raw material prices as well as the ongoing rise in energy and shipping costs.
SG&A expenses in the third quarter of 2022 slightly increased by 3%, to $7 million, compared to the same period in 2021.
Despite ongoing inflationary pressures, the third quarter 2022 EBITDA increased 13% compared to the same period in 2021.
Effective January 1, 2023, AMG will place its silicon metal plant in Pocking, Germany, on care and maintenance due to external economic factors and will review this decision on a quarterly basis. The overall EBITDA effect, should there be a shutdown longer than one quarter, is immaterial to AMG’s overall projected 2023 results.
Associated with this shutdown, AMG recorded income from the sale of an existing supply contract which positively impacted operating profit for the quarter. This income was offset by a settlement with a major customer and an impairment of existing assets. The future proceeds are also available to offset potential restructuring expenses in the future. The cost associated with retaining current employees for care and maintenance will be recorded as incurred in accordance with accounting standards.
AMG Critical Materials Technologies
Q3 ‘22
Q3 ‘21
Change
Revenue
$151,560
$127,246
19%
Gross profit
24,943
20,303
23%
Gross profit before non-recurring items
24,990
20,293
23%
Operating profit
6,491
3,333
95%
EBITDA
11,602
8,513
36%
AMG Critical Materials Technologies’ third quarter 2022 revenue increased by $24 million, or 19%, compared to the same period in 2021. This improvement was due to increased titanium alloys sales, as well as higher titanium alloy and chrome metal pricing. Third quarter 2022 gross profit before non-recurring items increased by $5 million, or 23%, to $25 million due to the higher volumes and prices.
SG&A expenses increased by 9% in the third quarter of 2022 compared to the same period in 2021, mainly driven by higher share-based and variable compensation expense and higher professional fees in the current quarter.
AMG Critical Materials Technologies’ EBITDA increased to $12 million during the quarter, compared to $9 million in the third quarter of 2021. This was primarily due to higher profitability in chrome metal and titanium alloys.
AMG Engineering signed $93 million in new orders during the third quarter of 2022, driven by strong orders of remelting, induction and heat treatment furnaces, representing a 1.73x book to bill ratio. Order backlog was $211 million as of September 30, 2022, 17% greater than the $181 million as of June 30, 2022.
Financial Review
Tax
AMG recorded an income tax expense of $39 million in the third quarter of 2022, compared to $10 million in the same period in 2021. This variance was mainly driven by enhanced operating results coupled with movements in the Brazilian real. The effects of the Brazilian real caused a $2 million deferred tax benefit in the third quarter of 2022 (2021: $8 million tax expense). Fluctuations in the Brazilian real exchange rate impact the valuation of the Company’s net deferred tax positions related to our operations in Brazil.
AMG paid taxes of $10 million in the third quarter of 2022, compared to tax payments of $4 million in the third quarter of 2021.
Exceptional Items
AMG’s third quarter 2022 gross profit includes exceptional items, which are not included in the calculation of EBITDA.
A summary of exceptional items included in gross profit in the third quarters of 2022 and 2021 are below:
Exceptional items included in gross profit
Q3 ‘22
Q3 ‘21
Change
Gross profit
$112,071
$51,083
119%
Restructuring expense
11
261
(96%)
Asset impairment expense (reversal)
11,587
(88)
N/A
Strategic project expense
1,241
1,095
13%
Others
—
506
N/A
Gross profit excluding exceptional items
124,910
52,857
136%
Energy Costs
Total energy costs were $5 million higher in the third quarter of 2022 versus the same period in 2021 due to significant increases in gas and electricity costs during the quarter. The majority of this increase was at our silicon business in Germany, but that business benefited from fully hedged power costs. Other business units benefited from long-term electricity contracts that have no price escalation clauses, and the business units that did experience energy cost increases were able to pass through most of these increased costs to their customers.
SG&A
AMG’s third quarter 2022 SG&A expenses were $37 million compared to $34 million in the third quarter of 2021, with the variance largely driven by higher compensation expense due to higher profitability forecasted for the year and increased professional fees associated with strategic projects.
Net Other Operating Income
AMG recorded a net contract settlement benefit of $46 million associated with the cancellation of a supply contract for AMG Silicon, offset by a settlement with a major customer.
Liquidity
September 30, 2022
December 31, 2021
Change
Senior secured debt
$357,685
$371,897
(4%)
Cash & cash equivalents
306,416
337,877
(9%)
Senior secured net debt
51,269
34,020
51%
Other debt
14,926
24,398
(39%)
Net debt excluding municipal bond
66,195
58,418
13%
Municipal bond debt
319,304
319,476
— %
Restricted cash
17,069
93,434
(82%)
Net debt
368,430
284,460
30%
AMG had a net debt position of $368 million as of September 30, 2022. This increase was mainly due to the significant investment in growth initiatives during the quarter.
AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the third quarter. As of September 30, 2022, the Company had $306 million in unrestricted cash and cash equivalents and $183 million available on its revolving credit facility. As such, AMG had $489 million of total liquidity as of September 30, 2022.
Net Finance Costs
AMG’s third quarter 2022 net finance costs were $14 million compared to $8 million in the third quarter of 2021. This increase was mainly driven by foreign exchange losses of $6 million during the quarter primarily due to non-cash intergroup balances.
AMG capitalized $2 million of interest costs in the third quarter of 2022 versus $4 million in the same period in 2021, driven by interest associated with the Company’s tax-exempt municipal bond supporting the vanadium expansion in Ohio. This decrease is due to a portion of the municipal bond interest costs which are no longer being capitalized due to the ramp-up of production at our Zanesville facility.
Profit (loss) for the period to EBITDA reconciliation
Q3 ‘22
Q3 ‘21
Profit (loss) for the period
$68,339
($310)
Income tax expense
38,603
9,904
Net finance cost
13,988
7,543
Equity-settled share-based payment transactions
1,386
1,015
Restructuring expense
11
261
Net contract settlements
(46,407)
—
Asset impairment expense (reversal)
11,587
(88)
Strategic project expense (1)
3,282
3,311
Share of loss of associates
750
209
Others
(3)
630
EBIT
91,536
22,475
Depreciation and amortization
11,067
10,576
EBITDA
102,603
33,051
(1) The Company is in the initial development and ramp-up phases for several strategic expansion projects, including AMG Vanadium’s expansion project, the joint venture with Shell, Hybrid Lithium Vanadium Redox Flow Battery System, and the lithium expansion in Germany, which incurred project expenses during the quarter but are not yet operational. AMG is adjusting EBITDA for these exceptional charges.
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Income Statement
For the quarter ended September 30
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Continuing operations
Revenue
424,813
311,946
Cost of sales
(312,742)
(260,863)
Gross profit
112,071
51,083
Selling, general and administrative expenses
(36,888)
(33,750)
Other income, net
46,497
13
Net other operating income
46,497
13
Operating profit
121,680
17,346
Finance income
1,222
357
Finance cost
(15,210)
(7,900)
Net finance cost
(13,988)
(7,543)
Share of loss of associates and joint ventures
(750)
(209)
Profit before income tax
106,942
9,594
Income tax expense
(38,603)
(9,904)
Profit (loss) for the period
68,339
(310)
Profit (loss) attributable to:
Shareholders of the Company
68,146
(599)
Non-controlling interests
193
289
Profit (loss) for the period
68,339
(310)
Earnings (loss) per share
Basic earnings (loss) per share
2.13
(0.02)
Diluted earnings (loss) per share
2.09
(0.02)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Income Statement
For the nine months ended September 30
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Continuing operations
Revenue
1,252,770
874,306
Cost of sales
(963,265)
(727,860)
Gross profit
289,505
146,446
Selling, general and administrative expenses
(111,384)
(100,075)
Environmental expense
—
(11,711)
Other income, net
46,619
186
Net other operating income (expense)
46,619
(11,525)
Operating profit
224,740
34,846
Finance income
3,602
831
Finance cost
(38,720)
(21,789)
Net finance cost
(35,118)
(20,958)
Share of loss of associates and joint ventures
(1,250)
(834)
Profit before income tax
188,372
13,054
Income tax expense
(60,270)
(3,414)
Profit for the period
128,102
9,640
Profit attributable to:
Shareholders of the Company
126,892
8,066
Non-controlling interests
1,210
1,574
Profit for the period
128,102
9,640
Earnings per share
Basic earnings per share
3.97
0.26
Diluted earnings per share
3.91
0.26
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
In thousands of US dollars
September 30, 2022 Unaudited
December 31, 2021
Assets
Property, plant and equipment
748,398
693,624
Goodwill and other intangible assets
40,241
44,684
Derivative financial instruments
34,753
95
Other investments
26,218
29,830
Deferred tax assets
32,824
52,937
Restricted cash
11,841
85,023
Other assets
8,709
8,471
Total non-current assets
902,984
914,664
Inventories
273,804
218,320
Derivative financial instruments
5,689
4,056
Trade and other receivables
160,789
145,435
Other assets
123,329
65,066
Current tax assets
8,621
5,888
Restricted cash
5,228
8,411
Cash and cash equivalents
306,416
337,877
Total current assets
883,876
785,053
Total assets
1,786,860
1,699,717
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
(continued)
In thousands of US dollars
September 30,2022 Unaudited
December 31, 2021
Equity
Issued capital
853
853
Share premium
553,715
553,715
Treasury shares
(14,906)
(16,596)
Other reserves
(54,829)
(96,421)
Retained earnings (deficit)
(66,832)
(173,117)
Equity attributable to shareholders of the Company
418,001
268,434
Non-controlling interests
23,978
25,718
Total equity
441,979
294,152
Liabilities
Loans and borrowings
662,181
675,384
Lease liabilities
39,318
45,692
Employee benefits
105,256
162,628
Provisions
14,031
14,298
Deferred revenue
20,541
22,341
Other liabilities
5,260
11,098
Derivative financial instruments
1,014
2,064
Deferred tax liabilities
16,263
5,617
Total non-current liabilities
863,864
939,122
Loans and borrowings
23,844
27,341
Lease liabilities
4,161
4,857
Short-term bank debt
5,890
13,046
Deferred revenue
22,713
18,478
Other liabilities
67,971
80,672
Trade and other payables
262,143
252,765
Derivative financial instruments
15,749
6,010
Advance payments from customers
40,766
35,091
Current tax liability
26,524
10,586
Provisions
11,256
17,597
Total current liabilities
481,017
466,443
Total liabilities
1,344,881
1,405,565
Total equity and liabilities
1,786,860
1,699,717
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
For the nine months ended September 30
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Cash from operating activities
Profit for the period
128,102
9,640
Adjustments to reconcile net profit to net cash flows:
Non-cash:
Income tax expense
60,270
3,414
Depreciation and amortization
32,957
32,478
Asset impairment expense (reversal)
11,587
(864)
Net finance cost
35,118
20,958
Share of loss of associates and joint ventures
1,250
834
Loss (gain) on sale or disposal of property, plant and equipment
12
(96)
Equity-settled share-based payment transactions
4,138
3,143
Movement in provisions, pensions, and government grants
(7,532)
(3,267)
Working capital and deferred revenue adjustments
(113,601)
17,908
Cash generated from operating activities
152,301
84,148
Finance costs paid, net
(19,014)
(14,960)
Income tax paid
(22,689)
(8,625)
Net cash from operating activities
110,598
60,563
Cash used in investing activities
Proceeds from sale of property, plant and equipment
151
1,071
Acquisition of property, plant and equipment and intangibles
(134,244)
(125,366)
Investments in associates and joint ventures
(1,250)
(1,000)
Change in restricted cash
76,365
94,092
Interest received on restricted cash
179
33
Capitalized borrowing cost
(15,307)
(15,608)
Other
12
(428)
Net cash used in investing activities
(74,094)
(47,206)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
(continued)
For the nine months ended September 30
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Cash (used in) from financing activities
Proceeds from issuance of debt
83
2,644
Payment of transaction costs related to debt
—
(390)
Repayment of borrowings
(23,948)
(8,047)
Net (repurchase of) proceeds from issuance of common shares
(1,523)
121,569
Dividends paid
(19,885)
(7,598)
Payment of lease liabilities
(3,738)
(3,939)
Contributions by non-controlling interests
—
648
Net cash (used in) from financing activities
(49,011)
104,887
Net (decrease) increase in cash and cash equivalents
(12,507)
118,244
Cash and cash equivalents at January 1
337,877
207,366
Effect of exchange rate fluctuations on cash held
(18,954)
(6,156)
Cash and cash equivalents at September 30
306,416
319,454
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
About AMG
AMG is a global critical materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.
AMG Clean Energy Materials segment combines AMG’s recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. AMG Clean Energy Materials segment spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies segment combines AMG’s leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals segment consists of AMG’s mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka, and Mozambique, and has sales and customer service offices in Japan (www.amg-nv.com).
For further information, please contact: AMG Advanced Metallurgical Group N.V.+1 610 975 4979 Michele Fischer mfischer@amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are “forward looking.” Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These forward-looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.
Amsterdam, 6September2022(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) announces its wholly owned subsidiary, AMG Lithium GmbH of Frankfurt (“AMG Lithium”), has signed a binding supply agreement (“Agreement”) with Korean company EcoPro (“EcoPro”), for an initial three-year term. AMG Lithium will supply EcoPro with battery-grade lithium hydroxide from its plant in Bitterfeld-Wolfen, Germany, which is recently under construction and scheduled to start commissioning in Q3 2023.
Under the Agreement, AMG Lithium will deliver a minimum of 5,000 tonnes per annum (“tpa”) of battery-grade lithium hydroxide to EcoPro BM’s cathode materials production plant in Debrecen, Hungary. The contract includes an option for additional volumes.
Initial quantities for qualification purposes are scheduled to be delivered in late 2023 – with regular quantities to follow in 2024.
AMG Lithium plans to produce an annual amount of 20,000 tpa of battery-grade lithium hydroxide in the first module in Bitterfeld-Wolfen with four additional modules planned to achieve a total annual production capacity of 100,000 tpa.
“We are happy to have reached this Agreement to supply EcoPro’s European cathode materials plant out of our Bitterfeld refinery. We are looking forward to growing our future business with EcoPro with additional quantities and potentially dedicating an entire module on an exclusive basis,” said Stefan Scherer, CEO of AMG Lithium.
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieeltoezicht).
About AMG
AMG is a global critical materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets. AMG Clean Energy Materials segment combines AMG’s recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. AMG Clean Energy Materials segment spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies segment combines AMG’s leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals segment consists of AMG’s mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka, and Mozambique, and has sales and customer service offices in Japan (www.amg-nv.com).
For further information, please contact: AMG Advanced Metallurgical Group N.V.+1 6109754979 Michele Fischer mfischer@amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are “forward looking”. Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved. These forward looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward looking statement is based.
Amsterdam, 28 July 2022(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) declares an interim dividend of €0.30 per ordinary share, from an interim dividend of €0.10 per ordinary share in the prior year.
The interim dividend of €0.30 per ordinary share, in respect of the period from January 1, 2022 to June 30, 2022, is payable on August 10, 2022 to shareholders of record as of August 2, 2022. The ex-dividend date will be August 1, 2022. Dutch withholding tax will be deducted from the dividend at a rate of 15%.
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
About AMG
AMG is a global critical materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.
AMG Clean Energy Materials segment combines AMG’s recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. AMG Clean Energy Materials segment spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies segment combines AMG’s leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals segment consists of AMG’s mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka, and Mozambique, and has sales and customer service offices in Japan (www.amg-nv.com).
For further information, please contact: AMG Advanced Metallurgical Group N.V.+1 6109754979 Michele Fischer mfischer@amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are “forward looking.” Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These forward-looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.
Construction and commissioning of the new vanadium spent catalyst recycling facility in Zanesville, Ohio is proceeding as planned. The roaster is fully operational, and the entire plant is expected to be at run-rate capacity by the end of the fourth quarter of 2022.
The project to expand the spodumene production in AMG Brazil is on time and on budget. The objective is to be in full production in the second half of 2023 or earlier.
AMG Lithium has started construction of the first European lithium refinery, and commissioning for the first module of the battery-grade lithium hydroxide upgrader will commence in the second half of 2023.
AMG’s first lithium vanadium battery (“LIVA”) for industrial power management applications is proceeding as planned and the objective is to be fully operational in the fourth quarter of 2022.
Shell & AMG Recycling B.V. (“SARBV”) and its partner, the United Company for Industry (“UCI”), have signed an agreement with Saudi Arabian Oil Company (“Aramco”). Basic engineering has begun on the first of four projects to build, own and operate a conversion plant of vanadium-containing gasification ash supplied by Aramco into vanadium oxide and vanadium electrolyte.
Financial Highlights
Revenue increased by 42% to $424.1 million in the second quarter of 2022 from $298.4 million in the second quarter of 2021.
EBITDA was $81.1 million in the second quarter of 2022, up 158% versus the second quarter 2021 EBITDA of $31.4 million, marking the highest six-month and quarterly EBITDA in AMG’s history and its eighth straight quarter of sequential improvement.
Annualized return on capital employed was 25.5% for the first six months of 2022, more than double the 10.0% for the same period in 2021.
Net income to shareholders for the second quarter of 2022 was $29.6 million, yielding 91 cents diluted earnings per share, compared to $3.6 million of net income to shareholders in the same period in the prior year and 11 cents diluted earnings per share.
AMG’s liquidity as of June 30, 2022, was $476 million, with $301 million of unrestricted cash and $175 million of revolving credit availability.
AMG declares an interim dividend of €0.30 per ordinary share, to be paid in the third quarter of 2022.
Amsterdam, 28 July 2022(Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported second quarter 2022 revenue of $424.1 million, a 42% increase versus the second quarter of 2021. EBITDA for the second quarter of 2022 was $81.1 million, a 158% increase versus the second quarter of 2021. This also marks the eighth straight quarter of sequential growth after the pandemic low point in the second quarter of 2020.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “AMG generated the highest quarterly EBITDA in our history in the second quarter of 2022. EBITDA for the second quarter of 2022 was $81 million, up 158% from the same period in 2021, and 48% higher than the first quarter of 2022. This outstanding result is mainly driven by our AMG Clean Energy Materials segment, where strong lithium prices lead to improved profitability in AMG Brazil, as well as by increased aerospace activity within our AMG Critical Materials Technologies segment.
“All of AMG’s strategic projects cluster in our AMG Clean Energy Materials segment and all of these projects are proceeding as planned. Each of these projects is oriented toward growing our production of electricity storage materials or increasing our footprint in the circular economy.
Commissioning has started at the Zanesville, Ohio, spent catalyst recycling facility. The roasting plant has reached its design capacity and is presently undergoing the final performance test. The “melt shop” is starting its commissioning process. With this new recycling plant, AMG solidifies its position as the world leader in the recycling of refinery waste. We are pleased to announce that large scale shipments of refinery waste from overseas have started.
The expansion project of AMG Brazil’s lithium concentrate production is proceeding as planned and the production is fully sold at market price via long-term contracts.
AMG Lithium has begun construction of the first European lithium refinery. The first module of the battery-grade lithium hydroxide upgrader will commence commissioning in the second half of 2023.
AMG’s first lithium vanadium battery (“LIVA”) for industrial power management applications has begun commissioning.
SARBV and UCI recently signed agreements in the Kingdom of Saudi Arabia. The joint venture plans to execute four distinct projects under an entity currently being formed, Advanced Circular Materials Company (“ACMC”):
Build, own and operate a conversion plant of vanadium-containing gasification ash into vanadium oxide and vanadium electrolyte for redox flow batteries;
A spent catalyst recycling facility;
A fresh catalyst R&D laboratory;
Mass energy storage facilities (vanadium redox flow battery manufacturing).
Basic engineering for the first project has begun and it will lay the foundation for all other projects with the Supercenter. It will produce and sell high-purity vanadium oxide and vanadium electrolyte. This is the largest such project in the world and is under long-term market-based contracts with Aramco. The materials this project will produce are destined to feed the emerging vanadium redox flow battery market.
“We are extremely pleased to announce the accomplishments of these strategic projects along with the best quarterly results in the history of the Company.”
Key Figures
In 000’s US dollars
Q2 ‘22
Q2 ‘21
Change
Revenue
$424,094
$298,374
42%
Gross profit
102,240
48,499
111%
Gross margin
24.1%
16.3%
Operating profit
65,246
3,691
1,668%
Operating margin
15.4%
1.2%
Net income attributable to shareholders
29,631
3,566
731%
EPS – Fully diluted
0.91
0.11
727%
EBIT (1)
69,763
20,462
241%
EBITDA (2)
81,126
31,401
158%
EBITDA margin
19.1%
10.5%
Cash from operating activities
39,505
23,018
72%
Notes:
(1) EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring, asset impairment, inventory cost adjustments, environmental provisions, exceptional legal expenses, equity-settled share-based payments, and strategic expenses.
(2) EBITDA is defined as EBIT adjusted for depreciation and amortization.
Operational Review
AMG Clean Energy Materials
Q2 ‘22
Q2 ‘21
Change
Revenue
$159,762
$90,135
77%
Gross profit
60,821
13,822
340%
Gross profit before non-recurring items
61,654
16,122
282%
Operating profit (loss)
49,704
(7,415)
N/A
EBITDA
58,232
12,554
364%
AMG Clean Energy Materials’ revenue increased 77% compared to the second quarter of 2021, to $159.8 million, driven mainly by higher prices in vanadium, tantalum and lithium concentrates. Sales volumes were down due to shipping schedule variances from AMG Brazil and maintenance downtime at our Cambridge facility.
Gross profit before non-recurring items for the quarter increased 282% compared to the same period in the prior year, primarily due to the increased price environment.
SG&A expenses in the second quarter of 2022 were $11.1 million, $1.6 million higher than the second quarter of 2021, largely due to higher share-based and variable compensation expense.
The second quarter 2022 EBITDA increased 364%, to $58.2 million, from $12.6 million in the second quarter of 2021, due to the improved gross profit as noted above.
AMG Critical Minerals
Q2 ‘22
Q2 ‘21
Change
Revenue
$103,416
$76,793
35%
Gross profit
14,028
13,732
2%
Gross profit before non-recurring items
14,029
13,397
5%
Operating profit
7,086
7,009
1%
EBITDA
9,069
9,220
(2%)
AMG Critical Minerals’ revenue increased by $26.6 million, or 35%, to $103.4 million, driven by strong sales volumes of antimony and graphite as well as higher sales prices in silicon and antimony.
Gross profit before non-recurring items of $14.0 million in the second quarter was $0.6 million higher compared to the second quarter of 2021. The higher revenue was due to the improved pricing and higher sales volumes noted above and was offset by increased raw material prices as well as the ongoing rise in energy and shipping costs.
SG&A expenses in the second quarter of 2022 slightly increased by 2%, to $7.0 million, compared to the same period in 2021.
The second quarter 2022 EBITDA was consistent with the same period in the prior year despite ongoing inflationary pressures including energy and shipping cost increases.
AMG Critical Materials Technologies
Q2 ‘22
Q2 ‘21
Change
Revenue
$160,916
$131,446
22%
Gross profit
27,391
20,945
31%
Gross profit before non-recurring items
27,431
21,059
30%
Operating profit
8,456
4,097
106%
EBITDA
13,825
9,627
44%
AMG Critical Materials Technologies’ second quarter 2022 revenue increased by $29.5 million, or 22%, compared to the same period in 2021. This improvement was due to increased titanium alloys sales, as well as higher chrome metal pricing associated with improving conditions in the aerospace sector. Second quarter 2022 gross profit before non-recurring items increased by $6.4 million, or 30%, to $27.4 million due to the higher volumes and prices.
SG&A expenses increased by $2.1 million in the second quarter of 2022 compared to the same period in 2021, mainly driven by higher share-based and variable compensation expense and higher professional fees in the current quarter.
AMG Critical Materials Technologies’ EBITDA increased to $13.8 million during the quarter, compared to $9.6 million in the second quarter of 2021. This was primarily due to higher profitability in chrome metal and titanium alloys.
AMG Engineering signed $59.8 million in new orders during the second quarter of 2022, driven by strong orders of induction furnaces, representing a 1.10x book to bill ratio. Order backlog was $181.0 million as of June 30, 2022, slightly lower than the $183.5 million as of March 31, 2022.
Financial Review
Tax
AMG recorded an income tax expense of $23.2 million in the second quarter of 2022, compared to an income tax benefit of $5.6 million in the same period in 2021. This variance was mainly driven by higher pre-tax income compared to the prior period and movements in the Brazilian real versus the US dollar. The effects of the Brazilian real caused a $3.8 million non-cash tax expense in the second quarter of 2022 compared to a $12.4 million non-cash tax benefit in the second quarter of 2021. Movements in the Brazilian real exchange rate impact the valuation of the Company’s net deferred tax positions related to our operations in Brazil.
AMG paid taxes of $9.1 million in the second quarter of 2022, compared to tax payments of $2.5 million in the second quarter of 2021.
Exceptional Items
AMG’s second quarter 2022 gross profit includes exceptional items, which are not included in the calculation of EBITDA.
A summary of exceptional items included in gross profit in the second quarters of 2022 and 2021 are below:
Exceptional items included in gross profit
Q2 ‘22
Q2 ‘21
Change
Gross profit
$102,240
$48,499
111%
Inventory cost adjustment
—
1,497
N/A
Restructuring expense
41
334
(88%)
Asset impairment reversal
—
(640)
N/A
Strategic project expense
833
888
(6%)
Gross profit excluding exceptional items
103,114
50,578
104%
Energy Costs
Total energy costs were $9.9 million higher in the second quarter of 2022 versus the same period in 2021 due to significant increases in gas and electricity costs during the quarter. The majority of this increase was at our silicon business in Germany, but that business benefited from fully hedged power costs. Other business units benefited from long-term electricity contracts that have no price escalation clauses, and the business units that did experience energy cost increases were able to pass through most of these increased costs to their customers.
SG&A
AMG’s second quarter 2022 SG&A expenses were $37.0 million compared to $33.2 million in the second quarter of 2021, with the variance largely driven by higher compensation expense due to higher profitability forecasted for the year and increased professional fees associated with strategic projects.
Liquidity
June 30, 2022
December 31, 2021
Change
Senior secured debt
$365,751
$371,897
(2%)
Cash & cash equivalents
300,758
337,877
(11%)
Senior secured net debt
64,993
34,020
91%
Other debt
22,644
24,398
(7%)
Net debt excluding municipal bond
87,637
58,418
50%
Municipal bond debt
319,363
319,476
—%
Restricted cash
42,182
93,434
(55%)
Net debt
364,818
284,460
28%
AMG had a net debt position of $364.8 million as of June 30, 2022. This increase was mainly due to the significant investment in growth initiatives during the quarter.
AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the second quarter. Employee benefit liabilities decreased $55 million during the quarter to $108 million mainly due to rising discount rates. This decrease in employee benefit liabilities combined with AMG’s higher earnings have increased our equity attributable to shareholders to $357 million, a 33% increase over the year-end value.
As of June 30, 2022, the Company had $301 million in unrestricted cash and cash equivalents and $175 million available on its revolving credit facility. As such, AMG had $476 million of total liquidity as of June 30, 2022.
Net Finance Costs
AMG’s second quarter 2022 net finance costs were $12.2 million compared to $4.8 million in the second quarter of 2021. This increase was mainly driven by non-cash intergroup related foreign exchange losses of $7.5 million during the quarter.
AMG capitalized $2.1 million of interest costs in the second quarter of 2022 versus $3.8 million in the same period in 2021, driven by interest associated with the Company’s tax-exempt municipal bond supporting the vanadium expansion in Ohio. This decrease is due to a portion of the municipal bond interest costs which are no longer being capitalized due to the ramp up of production at our Zanesville facility.
Outlook
AMG continues to provide strong and consistent results despite the global economic fallout from the geopolitical turbulence in recent months. We are continuing to focus on the things we can control and are extremely pleased with the noted achievements in our strategic initiatives which will drive long-term value creation. EBITDA was $81.1 million in the second quarter of 2022, the highest quarterly EBITDA in AMG’s history. As mentioned, it was the eighth straight quarter of sequential improvement.
As the year has progressed and more information is available, AMG is increasing its EBITDA guidance for the full year 2022 to a range of between $280 million and $300 million. This range is supported by AMG’s geographic diversification and the strength of the global lithium market.
Net income to EBITDA reconciliation
Q2 ‘22
Q2 ‘21
Net income
$29,879
$4,272
Income tax expense (benefit)
23,156
(5,580)
Net finance cost
12,211
4,761
Equity-settled share-based payment transactions
1,372
1,194
Restructuring expense
41
334
Inventory cost adjustment
—
1,497
Asset impairment reversal
—
(640)
Environmental provision
—
11,651
Strategic project expense (1)
3,107
2,525
Others
(3)
448
EBIT
69,763
20,462
Depreciation and amortization
11,363
10,939
EBITDA
81,126
31,401
(1) The Company is in the initial development and ramp-up phases for several strategic expansion projects, including AMG Vanadium’s expansion project, the joint venture with Shell, Hybrid Lithium Vanadium Redox Flow Battery System, and the lithium expansion in Germany, which incurred project expenses during the quarter but are not yet operational. AMG is adjusting EBITDA for these exceptional charges.
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Income Statement
For the quarter ended June 30
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Continuing operations
Revenue
424,094
298,374
Cost of sales
(321,854)
(249,875)
Gross profit
102,240
48,499
Selling, general and administrative expenses
(37,034)
(33,232)
Environmental expense
—
(11,651)
Other income, net
40
75
Net other operating income (expense)
40
(11,576)
Operating profit
65,246
3,691
Finance income
2,081
264
Finance cost
(14,292)
(5,025)
Net finance cost
(12,211)
(4,761)
Share of loss of associates and joint ventures
—
(238)
Profit (loss) before income tax
53,035
(1,308)
Income tax (expense) benefit
(23,156)
5,580
Profit for the period
29,879
4,272
Profit attributable to:
Shareholders of the Company
29,631
3,566
Non-controlling interests
248
706
Profit for the period
29,879
4,272
Earnings per share
Basic earnings per share
0.93
0.11
Diluted earnings per share
0.91
0.11
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Income Statement
For the six months ended June 30
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Continuing operations
Revenue
827,957
562,360
Cost of sales
(650,523)
(466,997)
Gross profit
177,434
95,363
Selling, general and administrative expenses
(74,496)
(66,325)
Environmental expense
—
(11,711)
Other income, net
122
173
Net other operating income (expense)
122
(11,538)
Operating profit
103,060
17,500
Finance income
2,380
474
Finance cost
(23,510)
(13,889)
Net finance cost
(21,130)
(13,415)
Share of loss of associates and joint ventures
(500)
(625)
Profit before income tax
81,430
3,460
Income tax (expense) benefit
(21,667)
6,490
Profit for the period
59,763
9,950
Profit attributable to:
Shareholders of the Company
58,746
8,665
Non-controlling interests
1,017
1,285
Profit for the period
59,763
9,950
Earnings per share
Basic earnings per share
1.84
0.29
Diluted earnings per share
1.81
0.28
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
In thousands of US dollars
June 30,2022 Unaudited
December 31, 2021
Assets
Property, plant and equipment
739,610
693,624
Goodwill and other intangible assets
41,761
44,684
Derivative financial instruments
22,508
95
Other investments
26,707
29,830
Deferred tax assets
39,953
52,937
Restricted cash
33,682
85,023
Other assets
8,394
8,471
Total non-current assets
912,615
914,664
Inventories
263,273
218,320
Derivative financial instruments
5,854
4,056
Trade and other receivables
194,563
145,435
Other assets
80,641
65,066
Current tax assets
9,093
5,888
Restricted cash
8,500
8,411
Cash and cash equivalents
300,758
337,877
Total current assets
862,682
785,053
Total assets
1,775,297
1,699,717
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
(continued)
In thousands of US dollars
June 30, 2022 Unaudited
December 31, 2021
Equity
Issued capital
853
853
Share premium
553,715
553,715
Treasury shares
(14,906)
(16,596)
Other reserves
(56,868)
(96,421)
Retained earnings (deficit)
(126,088)
(173,117)
Equity attributable to shareholders of the Company
356,706
268,434
Non-controlling interests
25,052
25,718
Total equity
381,758
294,152
Liabilities
Loans and borrowings
663,781
675,384
Lease liabilities
41,277
45,692
Employee benefits
107,827
162,628
Provisions
14,467
14,298
Deferred revenue
21,105
22,341
Other liabilities
7,116
11,098
Derivative financial instruments
818
2,064
Deferred tax liabilities
5,076
5,617
Total non-current liabilities
861,467
939,122
Loans and borrowings
31,528
27,341
Lease liabilities
4,237
4,857
Short-term bank debt
12,449
13,046
Deferred revenue
20,957
18,478
Other liabilities
83,078
80,672
Trade and other payables
283,443
252,765
Derivative financial instruments
12,518
6,010
Advance payments from customers
49,601
35,091
Current tax liability
18,318
10,586
Provisions
15,943
17,597
Total current liabilities
532,072
466,443
Total liabilities
1,393,539
1,405,565
Total equity and liabilities
1,775,297
1,699,717
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
For the six months ended June 30
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Cash from operating activities
Profit for the period
59,763
9,950
Adjustments to reconcile net profit to net cash flows:
Non-cash:
Income tax expense (benefit)
21,667
(6,490)
Depreciation and amortization
21,890
21,902
Asset impairment reversal
—
(776)
Net finance cost
21,130
13,415
Share of loss of associates and joint ventures
500
625
Loss (gain) on sale or disposal of property, plant and equipment
33
(91)
Equity-settled share-based payment transactions
2,752
2,127
Movement in provisions, pensions, and government grants
(2,917)
2,647
Working capital and deferred revenue adjustments
(63,774)
14,171
Cash generated from operating activities
61,044
57,480
Finance costs paid, net
(12,153)
(10,053)
Income tax paid
(13,040)
(4,499)
Net cash from operating activities
35,851
42,928
Cash used in investing activities
Proceeds from sale of property, plant and equipment
93
1,055
Acquisition of property, plant and equipment and intangibles
(82,608)
(78,606)
Investments in associates and joint ventures
(500)
(1,000)
Change in restricted cash
51,252
65,562
Interest received on restricted cash
76
25
Capitalized borrowing cost
(8,321)
(7,795)
Other
8
19
Net cash used in investing activities
(40,000)
(20,740)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
(continued)
For the six months ended June 30
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Cash (used in) from financing activities
Proceeds from issuance of debt
152
2,411
Payment of transaction costs related to debt
—
(390)
Repayment of borrowings
(8,437)
(3,127)
Net (repurchase of) proceeds from issuance common shares
(1,523)
121,569
Dividends paid
(10,098)
(3,858)
Payment of lease liabilities
(2,588)
(2,608)
Contributions by non-controlling interests
—
648
Net cash (used in) from financing activities
(22,494)
114,645
Net (decrease) increase in cash and cash equivalents
(26,643)
136,833
Cash and cash equivalents at January 1
337,877
207,366
Effect of exchange rate fluctuations on cash held
(10,476)
(3,097)
Cash and cash equivalents at June 30
300,758
341,102
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
About AMG
AMG is a global critical materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.
AMG Clean Energy Materials segment combines AMG’s recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. AMG Clean Energy Materials segment spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies segment combines AMG’s leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals segment consists of AMG’s mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka, and Mozambique, and has sales and customer service offices in Japan (www.amg-nv.com).
For further information, please contact: AMG Advanced Metallurgical Group N.V.+1 610 975 4979 Michele Fischer mfischer@amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are “forward looking.” Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These forward-looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.
Amsterdam, 5May 2022(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) is pleased to announce that during its Annual General Meeting held virtually on May 5, 2022, shareholders approved all agenda items presented, including the reappointment of Dr. Donatella Ceccarelli as an independent member of the Supervisory Board for a term of two years beginning May 5, 2022.
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
About AMG
AMG is a global critical materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.
AMG Clean Energy Materials segment combines AMG’s recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. AMG Clean Energy Materials segment spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies segment combines AMG’s leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals segment consists of AMG’s mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka, and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).
For further information, please contact: AMG Advanced Metallurgical Group N.V.+1 6109754979 Michele Fischer mfischer@amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are “forward looking.” Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These forward-looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.
Amsterdam, 5 May 2022(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) is pleased to announce that during the Annual General Meeting, held on May 5, 2022, AMG’s shareholders approved the payment of a dividend of €0.40 per ordinary share over the financial year 2021. The interim dividend of €0.10, paid on August 13, 2021, was deducted from the amount distributed to shareholders. The final dividend per ordinary share therefore amounts to €0.30.
Payment of the final dividend will be completed on May 12, 2022, to shareholders of record on May 10, 2022. The ex-dividend date is May 9, 2022. Dutch withholding tax will be deducted from the dividend at a rate of 15%.
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
About AMG
AMG is a global critical materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.
AMG Clean Energy Materials segment combines AMG’s recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. AMG Clean Energy Materials segment spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies segment combines AMG’s leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals segment consists of AMG’s mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka, and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).
For further information, please contact: AMG Advanced Metallurgical Group N.V.+1 6109754979 Michele Fischer mfischer@amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are “forward looking.” Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These forward-looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.
We continue to apply all safety measures at our disposal with the highest degree of attention to ensure our employees are working in the lowest risk environment possible. As a result, AMG has zero hospitalizations presently and has not experienced a facility closure or operational interruption.
Strategic Highlights
The commissioning of AMG Vanadium’s second spent catalyst recycling facility in Zanesville, Ohio is proceeding as planned. We continue our ramp up phase and the plant is forecast to achieve at run rate capacity in the fourth quarter of 2022.
AMG Brazil will increase its spodumene production by 40,000 tons, bringing its production capacity to 130,000 tons per annum. The project is proceeding as planned, construction will begin in the third quarter of 2022; and commissioning will commence in the second quarter of 2023.
AMG Lithium has started construction and will celebrate a groundbreaking ceremony at the Bitterfeld-Wolfen Chemical Park on May 11, 2022, for the first European lithium refinery, and commissioning for the first module of the battery grade lithium hydroxide upgrader will commence in the third quarter of 2023.
AMG’s first lithium vanadium battery (“LIVA”) for industrial power management applications is proceeding as planned and commissioning has begun at AMG Graphite located in Hauzenberg, Germany.
Financial Highlights
Revenue increased by 53% to $403.9 million in the first quarter of 2022 from $264.0 million in the first quarter of 2021.
EBITDA was $54.8 million in the first quarter of 2022, 93% higher than the first quarter 2021 EBITDA of $28.3 million, marking the seventh straight quarter of sequential improvement.
Annualized return on capital employed was 19.8% for the first three months of 2022, more than double the 9.4% for the same period in 2021.
AMG’s liquidity as of March 31, 2022, was $478 million, with $308 million of unrestricted cash and $170 million of revolving credit availability.
The Company has maintained its final 2021 declared dividend of €0.30 to be paid on May 12, 2022 to shareholders of record on May 10, 2022.
Amsterdam, 4 May 2022(Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported first quarter 2022 revenue of $403.9 million, a 53% increase over $264.0 million in the first quarter of 2021. EBITDA for the first quarter of 2022 was $54.8 million, a 93% increase over $28.3 million in the first quarter of 2021. This also marks the seventh straight quarter of sequential growth after the pandemic low point in the second quarter of 2020.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “With regard to COVID, we continue to apply all safety measures at our disposal with the highest degree of attention to ensure our employees are working in the lowest risk environment possible. Nothing is more important to AMG than the safety, health, and well-being of our workers and their families. All injuries and occupational illnesses are preventable, and we firmly believe that there is no job worth doing in an unsafe manner. Safety is understood across business units as our number one priority.
“AMG continued to sequentially improve EBITDA in the first quarter for the seventh time as prices increased and demand remains robust throughout our portfolio. We expect this to continue throughout the year. Our Clean Energy Materials segment continues to deliver strong EBITDA, which more than tripled since the first quarter of 2021, its eighth straight quarter of sequentially increasing EBITDA. The global lithium market has experienced very strong price increases. Ferrovanadium prices have recovered to a level above long-term averages. We have increased EBITDA guidance for 2022 twice since our initial guidance, and in the outlook section of this press release we do so again today.
“AMG’s key strategic projects are all proceeding as planned. The commissioning of the ferrovanadium plant in Zanesville, Ohio, which will essentially double our recycling capacity for refinery residues, is proceeding well and is expected to be producing at run rate capacity in the fourth quarter of 2022. Shell & AMG Recycling B.V. continues to pursue refinery residue opportunities globally to convert refinery waste streams into valuable products, including battery materials that will enable the acceleration of sustainable energy transition goals. AMG Brazil is expanding its lithium concentrate production by 40,000 tons, bringing its production capacity to 130,000 tons per annum. The groundbreaking for our new lithium hydroxide production facility in Germany will take place on May 11, 2022. AMG’s first lithium vanadium battery (“LIVA”) for industrial power management applications has begun commissioning.”
Key Figures
In 000’s US dollars
Q1 ‘22
Q1 ‘21
Change
Revenue
$403,863
$263,986
53%
Gross profit
75,194
46,864
60%
Gross margin
18.6%
17.8%
Operating profit
37,814
13,809
174%
Operating margin
9.4%
5.2%
Net income attributable to shareholders
29,115
5,099
471%
EPS – Fully diluted
0.89
0.18
394%
EBIT (1)
44,233
17,376
155%
EBITDA (2)
54,760
28,339
93%
EBITDA margin
13.6%
10.7%
Cash (used in) from operating activities
(3,654)
19,939
N/A
Notes:
(1) EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring, asset impairment, inventory cost adjustments, environmental provisions, exceptional legal expenses, equity-settled share-based payments, and strategic expenses.
(2) EBITDA is defined as EBIT adjusted for depreciation and amortization.
Operational Review
AMG Clean Energy Materials
Q1 ‘22
Q1 ‘21
Change
Revenue
$143,659
$70,627
103%
Gross profit
39,004
13,203
195%
Gross profit before non-recurring items
41,269
13,383
208%
Operating profit
28,219
3,605
683%
EBITDA
37,227
10,286
262%
AMG Clean Energy Materials’ revenue more than doubled compared to the first quarter of 2021, to $143.7 million, driven mainly by higher prices in vanadium, tantalum and lithium concentrates and higher volumes of lithium concentrate.
Gross profit before non-recurring items for the quarter more than tripled compared to the same period in the prior year, primarily due to the increased price environment.
SG&A expenses in the first quarter of 2022 were $10.8 million, $1.2 million higher than the first quarter of 2021, due to an increase in professional fees as a result of higher strategic project costs and higher shared-based and variable compensation expense.
The first quarter 2022 EBITDA increased by $26.9 million, to $37.2 million from $10.3 million in the first quarter of 2021, due to the improved gross profit as noted above.
AMG Critical Minerals
Q1 ‘22
Q1 ‘21
Change
Revenue
$106,909
$72,916
47%
Gross profit
13,002
13,154
(1%)
Gross profit before non-recurring items
13,048
13,071
—%
Operating profit
5,647
6,560
(14%)
EBITDA
7,883
9,012
(13%)
AMG Critical Minerals’ revenue increased by $34.0 million, or 47%, to $106.9 million, driven by strong sales volumes of antimony and graphite as well as higher sales prices across all three businesses.
Gross profit before non-recurring items of $13.0 million in the first quarter was in line with the first quarter of 2021. The higher revenue was due to the improved pricing and higher sales volumes noted above was offset by increased raw material prices, as well as the ongoing rise in energy and shipping costs.
SG&A expenses in the first quarter of 2022 slightly increased by $0.8 million, to $7.4 million, primarily due to higher share-based and variable compensation expense in the current quarter.
The first quarter 2022 EBITDA was $1.1 million lower than the same period in the prior year, due to increased SG&A costs.
AMG Critical Materials Technologies
Q1 ‘22
Q1 ‘21
Change
Revenue
$153,295
$120,443
27%
Gross profit
23,188
20,507
13%
Gross profit before non-recurring items
23,283
20,569
13%
Operating profit
3,948
3,644
8%
EBITDA
9,650
9,041
7%
AMG Critical Materials Technologies’ first quarter 2022 revenue increased by $32.9 million, or 27%, compared to the same period in 2021. This increase was due to increased titanium alloys sales, as well as higher titanium alloy and chrome metal pricing, offset by timing delays in Engineering projects. First quarter 2022 gross profit before non-recurring items increased by $2.7 million, or 13%, to $23.3 million due to the higher volumes and prices.
SG&A expenses increased by $2.4 million in the first quarter of 2022 compared to the same period in 2021, driven by an increase in professional fees and higher share-based and variable compensation expense in the current quarter.
AMG Critical Materials Technologies’ EBITDA increased to $9.7 million during the quarter, compared to $9.0 million in the first quarter of 2021. This was primarily due to higher profitability in chrome metal and titanium alloys.
The Company signed $61.1 million in new orders during the first quarter of 2022, driven by strong orders of remelting and heat treatment furnaces, representing a 1.09x book to bill ratio. Order backlog was $183.5 million as of March 31, 2022, in line with $188.2 million as of December 31, 2021.
Financial Review
Exceptional Items
AMG’s first quarter 2022 gross profit includes exceptional items, which are not included in the calculation of EBITDA.
A summary of exceptional items included in gross profit in the first quarters of 2022 and 2021 are below:
Exceptional items included in gross profit
Q1 ‘22
Q1 ‘21
Change
Gross profit
$75,194
$46,864
60%
Inventory cost adjustment
—
(333)
N/A
Restructuring expense
141
67
110%
Asset impairment reversal
—
(136)
N/A
Strategic project expense
2,265
561
304%
Gross profit excluding exceptional items
77,600
47,023
65%
Energy Costs
AMG experienced significant increases in gas and electricity costs in the first quarter of 2022. Total energy costs were $11.9 million higher in the first quarter of 2022 versus the same period in 2021. The majority of this increase was at our silicon business in Germany, but that business benefited from fully hedged power costs and increased silicon prices. Other business units benefited from long-term electricity contracts that have no price escalation clauses, and the business units that did experience energy cost increases were able to pass through most of these increased costs to their customers.
SG&A
AMG’s first quarter 2022 SG&A expenses were $37.5 million compared to $33.1 million in the first quarter of 2021, with the variance driven largely by an increase in professional fees due to higher strategic project costs and higher shared-based and variable compensation expense. The first quarter of 2021 personnel cost was reduced by cost reduction efforts in response to the onset of the pandemic.
Net Finance Costs
AMG’s first quarter 2022 net finance costs were $8.9 million compared to $8.7 million in the first quarter of 2021. This slight increase was mainly driven by higher borrowing rates during the quarter, which were partially offset by lower foreign exchange losses versus the prior period.
Tax
AMG recorded an income tax benefit of $1.5 million in the first quarter of 2022, compared to $0.9 million in the same period in 2021. This variance was mainly driven by higher pre-tax income compared to the prior period more than offset by movements in the Brazilian real versus the US dollar. The effects of the Brazilian real caused a $14.7 million non-cash deferred tax benefit in the first quarter 2022. Movements in the Brazilian real exchange rate impact the valuation of the Company’s net deferred tax positions related to our operations in Brazil.
AMG paid taxes of $3.9 million in the first quarter of 2022, compared to tax payments of $2.0 million in the first quarter of 2021.
Liquidity
March 31, 2022
December 31, 2021
Change
Senior secured debt
$371,323
$371,897
—%
Cash & cash equivalents
308,482
337,877
(9%)
Senior secured net debt
62,841
34,020
85%
Other debt
26,676
24,398
9%
Net debt excluding municipal bond
89,517
58,418
53%
Municipal bond debt
319,419
319,476
—%
Restricted cash
62,139
93,434
(33%)
Net debt
346,797
284,460
22%
AMG had a net debt position of $346.8 million as of March 31, 2022. This increase was mainly due to the significant investment in growth initiatives during the quarter.
AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the first quarter. As of March 31, 2022, the Company had $308 million in unrestricted cash and cash equivalents and $170 million available on its revolving credit facility. As such, AMG had $478 million of total liquidity as of March 31, 2022.
In January 2022, AMG Engineering entered into €140 million of long-term bilateral unsecured performance-based guarantee facility agreements. These guarantee arrangements support expected customer advanced payments and replace the existing guarantee arrangements.
In November 2021, AMG entered into a new $350 million 7-year senior secured term loan B facility (“term loan”) and a $200 million 5-year senior secured revolving credit facility (“revolver”). The total facility amount of $550 million replaced AMG’s prior credit facility and extended the term loan maturity from 2025 to 2028 and revolver maturity from 2023 to 2026. Further strengthening AMG’s commitment to Environmental, Social and Governance (ESG), annual CO2 intensity reduction targets were built into the Revolving Credit Facility, making it a Sustainability Linked Loan. In conjunction with this loan, AMG entered into a 5-year swap agreement through 2026, which fixed interest rates for the entire term loan at the prevailing low interest rates in November 2021.
Outlook
AMG was able to deliver strong results despite the continuing impact of COVID-19 and the fallout from the geopolitical turbulence in recent months. EBITDA was $54.8 million in the first quarter of 2022, 93% higher than the first quarter 2021 EBITDA of $28.3 million, and 25% higher than the fourth quarter of 2021. As mentioned, it was the seventh straight quarter of sequential improvement and we expect this trend to continue.
In December 2021, AMG increased its 2022 EBITDA guidance from “$150 million or more” to “$175 – $200 million.”
In February 2022, we further increased our EBITDA guidance for the full year 2022 to “$225 million or more.”
Given the improved market conditions within our portfolio, especially the lithium and also the vanadium markets, the new guidance is that 2022 EBITDA will be in the range of $260 to $290 million.
The last long-term EBITDA guidance was given in 2019, prior to the COVID period. In 2019, we said “we will reach an EBITDA of $350 million, or more, in 5 years, or earlier.”
Being now much closer to the year 2023, and despite the global disruption from the coronavirus and the geopolitical turbulence, we strongly reaffirm that guidance.
As to a new long-term EBITDA guidance, we will reach an EBITDA of $500 million, or more, in 5 years or earlier.
Net income to EBITDA reconciliation
Q1 ‘22
Q1 ‘21
Net income
$29,884
$5,678
Income tax benefit
(1,489)
(910)
Net finance cost
8,919
8,654
Equity-settled share-based payment transactions
1,380
1,114
Restructuring expense
141
67
Inventory cost adjustment
—
(333)
Strategic project expense (1)
4,796
2,552
Share of loss of associates
500
387
Others
102
167
EBIT
44,233
17,376
Depreciation and amortization
10,527
10,963
EBITDA
54,760
28,339
(1) The Company is in the ramp-up phase for several strategic expansion projects, including AMG Vanadium’s expansion project, the joint venture with Shell, Hybrid Lithium Vanadium Redox Flow Battery System, and the lithium expansion in Germany, which incurred project expenses during the quarter but are not yet operational. AMG is adjusting EBITDA for these exceptional charges.
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Income Statement
For the quarter ended March 31
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Continuing operations
Revenue
403,863
263,986
Cost of sales
(328,669)
(217,122)
Gross profit
75,194
46,864
Selling, general and administrative expenses
(37,462)
(33,093)
Other income, net
82
38
Net other operating income
82
38
Operating profit
37,814
13,809
Finance income
299
210
Finance cost
(9,218)
(8,864)
Net finance cost
(8,919)
(8,654)
Share of loss of associates and joint ventures
(500)
(387)
Profit before income tax
28,395
4,768
Income tax benefit
1,489
910
Profit for the period
29,884
5,678
Profit attributable to:
Shareholders of the Company
29,115
5,099
Non-controlling interests
769
579
Profit for the period
29,884
5,678
Earnings per share
Basic earnings per share
0.91
0.18
Diluted earnings per share
0.89
0.18
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
In thousands of US dollars
March 31,2022 Unaudited
December 31, 2021
Assets
Property, plant and equipment
719,054
693,624
Goodwill and other intangible assets
43,541
44,684
Derivative financial instruments
16,772
95
Other investments
29,212
29,830
Deferred tax assets
67,036
52,937
Restricted cash
53,728
85,023
Other assets
8,754
8,471
Total non-current assets
938,097
914,664
Inventories
246,037
218,320
Derivative financial instruments
3,721
4,056
Trade and other receivables
198,397
145,435
Other assets
67,691
65,066
Current tax assets
6,619
5,888
Restricted cash
8,411
8,411
Cash and cash equivalents
308,482
337,877
Total current assets
839,358
785,053
Total assets
1,777,455
1,699,717
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
(continued)
In thousands of US dollars
March 31,2022 Unaudited
December 31, 2021
Equity
Issued capital
853
853
Share premium
553,715
553,715
Treasury shares
(14,919)
(16,596)
Other reserves
(81,096)
(96,421)
Retained earnings (deficit)
(146,466)
(173,117)
Equity attributable to shareholders of the Company
312,087
268,434
Non-controlling interests
25,268
25,718
Total equity
337,355
294,152
Liabilities
Loans and borrowings
665,806
675,384
Lease liabilities
44,306
45,692
Employee benefits
159,590
162,628
Provisions
14,787
14,298
Deferred revenue
21,736
22,341
Other liabilities
9,388
11,098
Derivative financial instruments
769
2,064
Deferred tax liabilities
5,901
5,617
Total non-current liabilities
922,283
939,122
Loans and borrowings
36,847
27,341
Lease liabilities
4,844
4,857
Short-term bank debt
14,765
13,046
Deferred revenue
20,510
18,478
Other liabilities
81,203
80,672
Trade and other payables
266,860
252,765
Derivative financial instruments
6,090
6,010
Advance payments from customers
49,983
35,091
Current tax liability
19,671
10,586
Provisions
17,044
17,597
Total current liabilities
517,817
466,443
Total liabilities
1,440,100
1,405,565
Total equity and liabilities
1,777,455
1,699,717
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
For the quarter ended March 31
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Cash (used in) from operating activities
Profit for the period
29,884
5,678
Adjustments to reconcile net profit to net cash flows:
Non-cash:
Income tax benefit
(1,489)
(910)
Depreciation and amortization
10,527
10,963
Asset impairment reversal
—
(136)
Net finance cost
8,919
8,654
Share of loss of associates and joint ventures
500
387
(Gain) loss on sale or disposal of property, plant and equipment
(55)
9
Equity-settled share-based payment transactions
1,380
1,088
Movement in provisions, pensions, and government grants
(1,685)
(3,796)
Working capital and deferred revenue adjustments
(41,819)
4,748
Cash generated from operating activities
6,162
26,685
Finance costs paid, net
(5,917)
(4,749)
Income tax paid
(3,899)
(1,997)
Net cash (used in) from operating activities
(3,654)
19,939
Cash used in investing activities
Proceeds from sale of property, plant and equipment
59
171
Acquisition of property, plant and equipment and intangibles
(43,763)
(35,583)
Investments in associates and joint ventures
(500)
(1,000)
Change in restricted cash
31,295
33,878
Interest received on restricted cash
9
15
Capitalized borrowing cost
(7,886)
(7,722)
Other
8
13
Net cash used in investing activities
(20,778)
(10,228)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
(continued)
For the quarter ended March 31
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Cash used in financing activities
Proceeds from issuance of debt
1,835
1,481
Payment of transaction costs related to debt
—
(390)
Repayment of borrowings
(1,718)
(1,510)
Net (repurchase of) proceeds from issuance common shares
(1,523)
176
Payment of lease liabilities
(1,291)
(1,283)
Contributions by non-controlling interests
—
244
Net cash used in financing activities
(2,697)
(1,282)
Net (decrease) increase in cash and cash equivalents
(27,129)
8,429
Cash and cash equivalents at January 1
337,877
207,366
Effect of exchange rate fluctuations on cash held
(2,266)
(4,716)
Cash and cash equivalents at March 31
308,482
211,079
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
About AMG
AMG is a global critical materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.
AMG Clean Energy Materials segment combines AMG’s recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. AMG Clean Energy Materials segment spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies segment combines AMG’s leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals segment consists of AMG’s mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka, and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).
For further information, please contact: AMG Advanced Metallurgical Group N.V.+1 610 975 4979 Michele Fischer mfischer@amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are “forward looking.” Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These forward-looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.
We continue to apply all safety measures at our disposal with the highest degree of attention in order to ensure our employees are working in the lowest risk environment possible. Hospitalizations remain at a very low level and presently AMG has zero hospitalizations. AMG has not experienced a facility closure or operational interruption.
Strategic Highlights
Our Enabling CO2 Reduction Portfolio (ECO2RP) in 2021 enabled 79.0 million tons of CO2 reduction, 40% more than the 56.6 million tons of enabled CO2 reduction in 2020.
AMG today announces a 2030 commitment to reduce direct CO2 emissions as well as commitment to increase its ECO2RP portfolio over the same time period.
The construction of AMG Vanadium’s second spent catalyst recycling facility in Zanesville, Ohio is proceeding as planned. Commissioning has begun and the plant is forecast to achieve full run rate capacity in the fourth quarter of 2022.
AMG Brazil will increase its spodumene production by 40,000 tons, bringing its production capacity to 130,000 tons per annum. The project is currently in detailed engineering, with construction planned to commence at the beginning of the second half of 2022, and mechanical completion at the end of the first quarter of 2023.
Site preparation and building site facilities have started in Bitterfeld, Germany and commissioning for the first module of the battery grade lithium hydroxide upgrader will commence in the third quarter of 2023.
AMG’s first lithium vanadium battery (“LIVA”) for industrial power management applications is proceeding as planned.
In December, AMG announced that it will bring its lithium value chain under one new corporate entity to further increase the long-term value of AMG’s lithium activities. AMG Lithium activities are comprised of AMG’s Brazilian mining and processing plants as well as the German hydroxide project and include the Lithium solid-state battery research and development activities in Frankfurt.
Financial Highlights
Revenue increased by 30% to $330.4 million in the fourth quarter of 2021 from $253.5 million in the fourth quarter of 2020.
EBITDA was $43.9 million in the fourth quarter of 2021, 95% higher than the fourth quarter 2020 EBITDA of $22.5 million, marking the sixth straight quarter of sequential improvement. On a full-year basis, EBITDA in 2021 of $136.7 was more than double full year 2020 EBITDA.
Cash from operating activities was $30.2 million in the fourth quarter of 2021, and $90.8 million on a year-to-date basis, compared to $19.6 for full year 2020.
AMG’s liquidity as of December 31, 2021, was $508 million, with $338 million of unrestricted cash and $170 million of revolving credit availability.
The total 2021 dividend proposed is €0.40 per ordinary share, including the interim dividend of €0.10, paid on August 13, 2021.
In November, AMG entered into a new $350 million 7-year senior secured term loan B facility and a $200 million 5-year senior secured revolving credit facility, which together replaced AMG’s prior credit facility and extended the term loan maturity from 2025 to 2028 and revolver maturity from 2023 to 2026. Further strengthening AMG’s commitment to Environmental, Social and Governance (ESG), annual CO2 intensity reduction targets were built into the Revolving Credit Facility, making it a Sustainability Linked Loan.
Amsterdam, 23 February 2022(Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported fourth quarter 2021 revenue of $330.4 million, a 30% increase over $253.5 million in the fourth quarter of 2020. EBITDA for the fourth quarter of 2021 was $43.9 million, a 95% increase over $22.5 million in the fourth quarter of 2020. This also marks the sixth straight quarter of sequential growth after the pandemic low point in the second quarter of 2020.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “With regard to COVID, we continue to apply all safety measures at our disposal with the highest degree of attention in order to ensure our employees are working in the lowest risk environment possible.
“AMG continued to sequentially improve EBITDA in the fourth quarter and on a full-year basis 2021 EBITDA more than doubled 2020 EBITDA. AMG continues to see price increases and strong volumes throughout our portfolio. Our Clean Energy Materials segment continues to deliver strong EBITDA, which more than tripled since the fourth quarter of 2020, its seventh straight quarter of sequentially increasing EBITDA.
“We are pleased to announce our Enabling CO2 Reduction Portfolio (ECO2RP) in 2021 enabled 79.0 million tons of CO2 reduction, 40% more than the 56.6 million tons of enabled CO2 reduction in 2020.
“As regard to our key strategic projects, the construction of the ferrovanadium plant in Zanesville, Ohio, which will essentially double our recycling capacity for refinery residues, is nearly complete. Shell & AMG Recycling B.V. continues to pursue circular refinery residue opportunities globally; this project advances the goals of a circular economy and is essential in achieving societal benefits of reducing global CO2 emissions. AMG Brazil will increase its spodumene production by 40,000 tons, bringing its production capacity to 130,000 tons per annum. We have begun site preparation for our new lithium hydroxide production facility in Germany and the groundbreaking ceremony will take place on May 11th. AMG’s first lithium vanadium battery (“LIVA”) for industrial power management applications is proceeding as planned.
“During AMG’s Capital Markets Day on January 11th we explained our strategy to further develop our lithium value chain activities and commented on the strategic options.”
Key Figures
In 000’s US dollars
Q4 ‘21
Q4 ‘20
Change
FY ‘21
FY ‘20
Change
Revenue
$330,360
$253,476
30%
$1,204,666
$937,116
29%
Gross profit
61,797
28,103
120%
208,243
112,653
85%
Gross margin
18.7%
11.1%
17.3%
12.0%
Operating profit (loss)
22,295
(2,184)
N/A
57,141
(9,235)
N/A
Operating margin
6.7%
(0.9%)
4.7%
(1.0%)
Net income (loss) attributable to shareholders
5,705
(2,839)
N/A
13,771
(41,692)
N/A
EPS – Fully diluted
0.18
(0.10)
N/A
0.44
(1.47)
N/A
EBIT (1)
32,678
11,059
195%
92,991
23,106
302%
EBITDA (2)
43,885
22,539
95%
136,676
66,767
105%
EBITDA margin
13.3%
8.9%
11.3%
7.1%
Cash from operating activities
30,225
11,358
166%
90,788
19,619
363%
Notes:
(1) EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring, asset impairment, inventory cost adjustments, environmental provisions, exceptional legal expenses, equity-settled share-based payments, and strategic expenses. Beginning January 1, 2021, AMG has altered its calculation of adjusted EBIT to no longer include the impact of foreign exchange. This alteration was made in consideration of a change in the Company’s hedging policy and to better align the reported adjusted EBITDA with the calculation for our bank covenant calculations. Starting January 2021, the Company is no longer hedging European cash pool intergroup balance sheet exposures which will result in higher volatility in our financial results from foreign exchange which we believe is not representative of our operating performance. Foreign exchange loss in the fourth quarter of 2021 was $2.8 million. Because of this hedging policy change, we did not retroactively apply this change to the prior year figures, otherwise it would have resulted in a decrease to the prior period EBIT of $1.1 million.
(2) EBITDA is defined as EBIT adjusted for depreciation and amortization.
Operational Review
AMG Clean Energy Materials
Q4 ‘21
Q4 ‘20
Change
FY ‘21
FY ‘20
Change
Revenue
$115,405
$66,995
72%
$381,475
$245,664
55%
Gross profit
27,950
6,004
366%
75,095
11,994
526%
Gross profit before non-recurring items
29,038
8,562
239%
80,264
21,261
278%
Operating profit (loss)
16,301
(5,118)
N/A
22,476
(24,522)
N/A
EBITDA
25,753
7,081
264%
66,622
10,580
530%
AMG Clean Energy Materials’ revenue increased by $48.4 million, or 72%, to $115.4 million, driven mainly by higher prices in vanadium, tantalum and lithium concentrates offset by lower volumes in each product.
Gross profit before non-recurring items for the quarter increased by $20.5 million compared to the same period in the prior year, primarily due to the increased price environment.
SG&A expenses in the fourth quarter of 2021 were $11.7 million, $4.6 million higher than the fourth quarter of 2020 due to higher strategic project costs and increased shared-based and variable compensation expense.
The fourth quarter 2021 EBITDA increased by $18.7 million, to $25.8 million from $7.1 million in the fourth quarter of 2020, due to the improved gross profit as noted above.
AMG Critical Minerals
Q4 ‘21
Q4 ‘20
Change
FY ‘21
FY ‘20
Change
Revenue
$79,422
$55,483
43%
$308,523
$213,318
45%
Gross profit
11,189
10,557
6%
48,735
35,629
37%
Gross profit before non-recurring items
11,379
11,651
(2%)
48,690
36,806
32%
Operating profit
2,584
5,279
(51%)
20,181
14,167
42%
EBITDA
6,459
8,871
(27%)
31,200
25,888
21%
AMG Critical Minerals’ revenue increased by $23.9 million, or 43%, to $79.4 million, driven by very strong sales volumes of antimony and improved sales prices across all three businesses.
Gross profit before non-recurring items decreased by 2% in the fourth quarter due to the continuing rise in energy and shipping costs, which were only partially passed on to customers.
SG&A expenses in the fourth quarter of 2021 increased by $3.4 million, to $8.7 million, primarily due to higher share-based and variable compensation expense in the current quarter.
The fourth quarter 2021 EBITDA was $2.4 million lower than the same period in the prior year, due to higher SG&A costs as well as lower profitability driven by higher energy and shipping costs.
AMG Critical Materials Technologies
Q4 ‘21
Q4 ‘20
Change
FY ‘21
FY ‘20
Change
Revenue
$135,533
$130,998
3%
$514,668
$478,134
8%
Gross profit
22,658
11,542
96%
84,413
65,030
30%
Gross profit before non-recurring items
22,388
15,303
46%
84,309
70,386
20%
Operating profit (loss)
3,410
(2,345)
N/A
14,484
1,120
1,193%
EBITDA
11,673
6,587
77%
38,854
30,299
28%
AMG Critical Materials Technologies’ fourth quarter 2021 revenue increased by $4.5 million, or 3% compared to the same period in 2020. This increase was due to higher sales volumes of titanium alloys and higher prices of titanium alloys and chrome metal driven by stronger demand from our aerospace customers. Therefore, fourth quarter 2021 gross profit before non-recurring items increased by $7.1 million, or 46%, to $22.4 million.
SG&A expenses increased by $5.4 million in the fourth quarter of 2021 compared to the same period in 2020, due to higher share-based and variable compensation expense in the current quarter.
AMG Critical Materials Technologies’ EBITDA increased to $11.7 million during the quarter, compared to $6.6 million in the fourth quarter of 2020. This was primarily due to higher profitability in chrome metal and titanium alloys.
The Company signed $84.9 million in new orders during the fourth quarter of 2021, driven by strong orders of remelting, induction, and heat treatment furnaces in China, representing a 1.61x book to bill ratio. Order backlog was $188.2 million as of December 31, 2021, 21% higher than $155.1 million as of September 30, 2021, due largely to strong orders of remelting, heat treatment, and induction furnaces. On a full year basis, the Company signed $227.5 million in new orders, representing a balanced 1.00x book to bill ratio.
Financial Review
Tax
AMG recorded an income tax expense of $8.7 million in 2021, compared to $11.2 in 2020. This variance was mainly driven by improved financial performance offset by movements in the Brazilian real versus the US dollar. The effects of the Brazilian real caused a $3.5 million non-cash deferred tax benefit in 2021. Movements in the Brazilian real exchange rate impact the valuation of the Company’s net deferred tax positions related to our operations in Brazil.
AMG paid taxes of $9.9 million in 2021, comprised of $12.9M of cash tax payments net of $3.0 million of refunds. In 2020 AMG paid $8.6 million in taxes, comprised of $18.5 million cash payments net of $9.9 million of refunds. The higher cash payments in 2020 were largely a result of payments of taxes owed from profitable prior years, and the refunds in both years resulted from overpayment in prior years.
Exceptional Items
AMG’s fourth quarter and full year 2021 gross profit includes exceptional items, which are not included in the calculation of EBITDA.
A summary of exceptional items included in gross profit in 2021 and 2020 are below:
Exceptional items included in gross profit
Q4 ‘21
Q4 ‘20
Change
FY ‘21
FY ‘20
Change
Gross profit
$61,797
$28,103
120%
$208,243
$112,653
85%
Inventory cost adjustment
—
2,160
(100%)
1,164
6,219
(81%)
Restructuring (reversal) expense
(140)
4,374
N/A
522
5,700
(91%)
Asset impairment expense (reversal)
153
566
(73%)
(711)
664
N/A
Strategic project expense
1,501
313
380%
4,045
3,217
26%
Others
(506)
—
N/A
—
—
N/A
Gross profit excluding exceptional items
62,805
35,516
77%
213,263
128,453
66%
Liquidity
December 31, 2021
December 31, 2020
Change
Senior secured debt
$371,897
$364,640
2%
Cash & cash equivalents
337,877
207,366
63%
Senior secured net debt
34,020
157,274
(78%)
Other debt
24,398
19,876
23%
Net debt excluding municipal bond
58,418
177,150
(67%)
Municipal bond debt
319,476
319,699
—
Restricted cash
93,434
208,919
(55%)
Net debt
284,460
287,930
(1%)
AMG had a net debt position of $284.5 million as of December 31, 2021.
AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the fourth quarter. As of December 31, 2021, the Company had $338 million in unrestricted cash and cash equivalents and $170 million available on its revolving credit facility. As such, AMG had $508 million of total liquidity as of December 31, 2021.
In January 2022, AMG entered into €140 million of long-term bilateral unsecured performance-based guarantee facility agreements. These guarantee arrangements support expected customer advanced payments and replace the existing guarantee arrangements.
In November, AMG entered into a new $350 million 7-year senior secured term loan B facility and a $200 million 5-year senior secured revolving credit facility, which together replaced AMG’s prior credit facility and extended the term loan maturity from 2025 to 2028 and revolver maturity from 2023 to 2026. Further strengthening AMG’s commitment to Environmental, Social and Governance, annual CO2 intensity reduction targets were built into the Revolving Credit Facility, making it a Sustainability Linked Loan.
Net Finance Costs
AMG’s fourth quarter 2021 net finance costs were $12.6 million compared to $4.9 million in the fourth quarter of 2020. This increase was mainly driven by the write-off of prior unamortized debt issuance fees during the quarter associated with the refinancing noted above and foreign exchange losses during the quarter.
AMG capitalized $3.8 million of interest costs in the fourth quarter of 2021, in line with $3.8 million in the same period in 2020, driven by interest associated with the Company’s tax-exempt municipal bond supporting the vanadium expansion in Ohio.
SG&A
AMG’s fourth quarter 2021 SG&A expenses were $39.5 million compared to $26.1 million in the fourth quarter of 2020, with the variance driven largely by increased strategic project costs and higher shared-based and variable compensation expense.
Full year 2021 SG&A expenses were $139.6 million, an increase of $21.8 million, or 19%, versus the prior year. SG&A expenses for 2021 included $89.9 million in personnel costs compared to $68.0 million in 2020. The 2021 personnel costs were increased due to higher share-based and variable compensation expense associated with our profitability during the year, and the 2020 personnel cost was reduced by cost reduction efforts in response to the onset of the pandemic.
Net Income to Shareholders
Net income to shareholders for the fourth quarter of 2021 was $5.7 million compared to a loss of $2.8 million in 2020. Earnings in the fourth quarter of 2021 were impacted (net of tax) by three large non-cash charges: first, a $3.7 million write-off of unamortized financing expenses from the 2018 financing; second, a $4.7 million charge related to 2019 share-based compensation awards which were not expected to vest at the end of the prior year, however, due to higher than anticipated profitability in the current year the awards are now expected to vest; third, a $2.0 million foreign exchange charge due primarily to intercompany debt balances. Excluding these non-cash charges, AMG would have net income to shareholders of $16.1 million, or $0.50 diluted earnings per share, in the fourth quarter of 2021.
Final Dividend Proposed
AMG intends to declare a dividend of €0.40 per ordinary share over the financial year 2021. The interim dividend of €0.10, paid on August 13, 2021, will be deducted from the amount to be distributed to shareholders. The proposed final dividend per ordinary share therefore amounts to €0.30.
A proposal to resolve upon the final dividend distribution will be included on the agenda for the Annual General Meeting to be held on May 5th, 2022.
Outlook
Previously, AMG increased its EBITDA guidance for full year 2022 to $225 million or higher based on significantly improved market conditions in lithium and we reaffirm this guidance.
AMG anticipates the Company will increase overall staffing from about 3,300 at the end of 2021 by 5 to 10% due to the hiring associated with the ramp-up of the vanadium expansion in Ohio and the lithium expansion in Germany.
Capital expenditures for 2022 are expected to be between $175 million and $200 million mainly driven by the finalization of construction for the vanadium expansion in Ohio and expenditures related to the construction of the lithium hydroxide plant in Germany.
With regard to financing in 2022, AMG has recently finalized its debt refinancing and although we look to consistently optimize our financial structure, our current liquidity can fully fund all of the approved capital expansion projects mentioned above.
In addition, AMG is pleased to announce a two-pronged commitment to reduce our CO2 emissions and increase our enabled CO2 savings through 2030:
AMG commits to reduce its direct CO2 emissions by 20% by 2030 from a baseline of 2019 (i.e., pre COVID) adjusted for the startup of our Zanesville facility. This is a total reduction of 125,000 tons of CO2.
AMG commits to increase its enabled CO2 reduction by 10% per annum from 2021 levels of 79.0 million through 2030.
(2) Amount includes variable compensation expense which settled in shares in 2021.
(3) The Company is in the ramp-up phase for several strategic expansion projects, including AMG Vanadium’s expansion project, the joint venture with Shell, Hybrid Lithium Vanadium Redox Flow Battery System, and the lithium expansion in Germany, which incurred project expenses during the quarter but are not yet operational. AMG is adjusting EBITDA for these exceptional charges.
AMG Advanced Metallurgical Group N.V.
Consolidated Income Statement
For the quarter ended December 31
In thousands of US dollars
2021
2020
Unaudited
Continuing operations
Revenue
330,360
253,476
Cost of sales
(268,563)
(225,373)
Gross profit
61,797
28,103
Selling, general and administrative expenses
(39,501)
(26,065)
Environmental expense
(230)
(4,287)
Other income, net
229
65
Net other operating expense
(1)
(4,222)
Operating profit (loss)
22,295
(2,184)
Finance income
1,107
2,311
Finance cost
(13,751)
(7,172)
Net finance cost
(12,644)
(4,861)
Share of loss of associates and joint ventures
(219)
(518)
Profit (loss) before income tax
9,432
(7,563)
Income tax (expense) benefit
(5,293)
4,950
Profit (loss) for the period
4,139
(2,613)
Profit (loss) attributable to:
Shareholders of the Company
5,705
(2,839)
Non-controlling interests
(1,566)
226
Profit (loss) for the period
4,139
(2,613)
Earnings (loss) per share
Basic earnings (loss) per share
0.18
(0.10)
Diluted earnings (loss) per share
0.18
(0.10)
AMG Advanced Metallurgical Group N.V.
Consolidated Income Statement
For the year ended December 31
In thousands of US dollars
2021
2020
Unaudited
Continuing operations
Revenue
1,204,666
937,116
Cost of sales
(996,423)
(824,463)
Gross profit
208,243
112,653
Selling, general and administrative expenses
(139,576)
(117,780)
Environmental expense
(11,941)
(4,342)
Other income, net
415
234
Net other operating expense
(11,526)
(4,108)
Operating profit (loss)
57,141
(9,235)
Finance income
1,938
4,757
Finance cost
(35,540)
(25,851)
Net finance cost
(33,602)
(21,094)
Share of loss of associates and joint ventures
(1,053)
(947)
Profit (loss) before income tax
22,486
(31,276)
Income tax expense
(8,707)
(11,184)
Profit (loss) for the year
13,779
(42,460)
Profit (loss) attributable to:
Shareholders of the Company
13,771
(41,692)
Non-controlling interests
8
(768)
Profit (loss) for the year
13,779
(42,460)
Earnings (loss) per share
Basic earnings (loss) per share
0.44
(1.47)
Diluted earnings (loss) per share
0.44
(1.47)
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Financial Position
In thousands of US dollars
December 31,
2021
Unaudited
December 31, 2020
Assets
Property, plant and equipment
693,624
551,926
Goodwill and other intangible assets
44,684
43,207
Derivative financial instruments
95
1,894
Other investments
29,830
27,527
Deferred tax assets
52,937
58,081
Restricted cash
85,023
208,919
Other assets
8,471
8,496
Total non-current assets
914,664
900,050
Inventories
218,320
152,306
Derivative financial instruments
4,056
5,961
Trade and other receivables
145,435
122,369
Other assets
65,066
44,821
Current tax assets
5,888
5,108
Restricted cash
8,411
—
Cash and cash equivalents
337,877
207,366
Assets held for sale
—
1,005
Total current assets
785,053
538,936
Total assets
1,699,717
1,438,986
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Financial Position
(continued)
In thousands of US dollars
December 31,
2021
Unaudited
December 31, 2020
Equity
Issued capital
853
831
Share premium
553,715
489,546
Treasury shares
(16,596)
(80,165)
Other reserves
(96,421)
(110,593)
Retained earnings (deficit)
(173,117)
(184,139)
Equity attributable to shareholders of the Company
268,434
115,480
Non-controlling interests
25,718
25,790
Total equity
294,152
141,270
Liabilities
Loans and borrowings
675,384
673,262
Lease liabilities
45,692
47,092
Employee benefits
162,628
197,158
Provisions
14,298
15,322
Deferred revenue
22,341
4,361
Other liabilities
11,098
8,237
Derivative financial instruments
2,064
4,389
Deferred tax liabilities
5,617
5,398
Total non-current liabilities
939,122
955,219
Loans and borrowings
27,341
23,392
Lease liabilities
4,857
4,789
Short-term bank debt
13,046
7,561
Deferred revenue
18,478
1,623
Other liabilities
80,672
66,182
Trade and other payables
252,765
164,999
Derivative financial instruments
6,010
10,264
Advance payments from customers
35,091
29,885
Current tax liability
10,586
7,480
Provisions
17,597
26,322
Total current liabilities
466,443
342,497
Total liabilities
1,405,565
1,297,716
Total equity and liabilities
1,699,717
1,438,986
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Cash Flows
For the year ended December 31
In thousands of US dollars
2021
2020
Unaudited
Cash from operating activities
Profit (loss) for the period
13,779
(42,460)
Adjustments to reconcile net profit (loss) to net cash flows:
Non-cash:
Income tax expense
8,707
11,184
Depreciation and amortization
43,685
43,661
Asset impairment (reversal) expense
(711)
664
Net finance cost
33,602
21,094
Share of loss of associates and joint ventures
1,053
947
(Gain) loss on sale or disposal of property, plant and equipment
(65)
358
Equity-settled share-based payment transactions
10,028
1,429
Movement in provisions, pensions, and government grants
(10,184)
(121)
Working capital and deferred revenue adjustments
22,747
10,829
Cash generated from operating activities
122,641
47,585
Finance costs paid, net
(21,950)
(19,410)
Income tax paid
(9,903)
(8,556)
Net cash from operating activities
90,788
19,619
Cash used in investing activities
Proceeds from sale of property, plant and equipment
1,029
71
Acquisition of property, plant and equipment and intangibles
(162,240)
(123,695)
Acquisitions of subsidiaries
(458)
—
Investments in associates and joint ventures
(1,000)
(1,000)
Change in restricted cash
115,485
100,662
Interest received on restricted cash
39
1,120
Capitalized borrowing cost
(15,838)
(15,150)
Other
30
76
Net cash used in investing activities
(62,953)
(37,916)
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Cash Flows
(continued)
For the year ended December 31
In thousands of US dollars
2021
2020
Unaudited
Cash from (used in) financing activities
Proceeds from issuance of debt
352,152
9,190
Payment of transaction costs related to debt
(7,630)
—
Repayment of borrowings
(342,781)
(4,072)
Proceeds from issuance of common shares
123,627
—
Net repurchase of common shares
(2,058)
(638)
Dividends paid
(7,598)
(9,513)
Payment of lease liabilities
(5,313)
(4,738)
Contributions by non-controlling interests
667
597
Net cash from (used in) financing activities
111,066
(9,174)
Net increase (decrease) in cash and cash equivalents
138,901
(27,471)
Cash and cash equivalents at January 1
207,366
226,218
Effect of exchange rate fluctuations on cash held
(8,390)
8,619
Cash and cash equivalents at December 31
337,877
207,366
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
About AMG
AMG is a global critical materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.
AMG Clean Energy Materials segment combines AMG’s recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. AMG Clean Energy Materials segment spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies segment combines AMG’s leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals segment consists of AMG’s mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka, and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).
For further information, please contact: AMG Advanced Metallurgical Group N.V.+1 610 975 4979 Michele Fischer mfischer@amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are “forward looking.” Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These forward-looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.
Amsterdam,1February2022(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM) is pleased to increase its EBITDA guidance for 2022. In December 2021 AMG increased its EBITDA guidance for the full year 2022 to a range of between $175 million and $200 million. Since then, lithium market conditions have significantly improved. As a result, AMG is increasing its EBITDA guidance for 2022 to $225 million or higher.
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
About AMG
AMG is a global critical materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.
AMG Clean Energy Materials segment combines our recycling and mining operations producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. AMG Clean Energy Materials segment spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies segment combines our leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals segment consists of our mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka, and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).
For further information, please contact: AMG Advanced Metallurgical Group N.V.+1 6109754979 Michele Fischer mfischer@amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are “forward looking.” Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These forward-looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.