Amsterdam, 4 May 2023(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) is pleased to announce that during its Annual General Meeting held on May 4, 2023, shareholders approved all agenda items presented, including the reappointment of Dr. Heinz Schimmelbusch as Chief Executive Officer and Chairman of the Management Board for an additional term of two years, with effect from May 4, 2023.
During the meeting, Professor Steve Hanke and Mr. Herb Depp were reappointed as independent members of the Supervisory Board for terms of two years each, beginning May 4, 2023.
Ms. Dagmar Bottenbruch has decided to step down from AMG’s Supervisory Board in view of other pressing priorities in her career, having served on AMG’s Supervisory Board since 2019. Given the vacancy created by the departure of Ms. Bottenbruch, Dr. Anne Roby was appointed as an independent member of the Supervisory Board for a term of four years beginning May 4, 2023.
Approval was also granted for the Company’s articles of association to be amended to accommodate the name change of the Company to ”AMG Critical Materials N.V.” The reason for the change from AMG Advanced Metallurgical Group N.V. is explained in the Letter to Shareholders of the 2022 Annual Report.
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’s mission is to provide critical materials and related process technologies to advance a less carbon-intensive world. To this end, AMG is focused on the production and development of energy storage materials such as lithium, vanadium, and tantalum. In addition, AMG’s products include highly engineered systems to reduce CO2 in aerospace engines, as well as critical materials addressing CO2 reduction in a variety of other end use 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 3,600 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, 4 May 2023(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 4, 2023, AMG’s shareholders approved the payment of a dividend of €0.70 per ordinary share over the financial year 2022. The interim dividend of €0.30, paid on August 10, 2022, was deducted from the amount distributed to shareholders. The final dividend per ordinary share therefore amounts to €0.40.
Payment of the final dividend will be completed on or around May 11, 2023, to shareholders of record on May 9, 2023. The ex-dividend date is May 8, 2023. 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’s mission is to provide critical materials and related process technologies to advance a less carbon-intensive world. To this end, AMG is focused on the production and development of energy storage materials such as lithium, vanadium, and tantalum. In addition, AMG’s products include highly engineered systems to reduce CO2 in aerospace engines, as well as critical materials addressing CO2 reduction in a variety of other end use 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 3,600 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, 3 May 2023(Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported first quarter 2023 revenue of $451 million, a 12% increase versus the same period in 2022. First quarter 2023 EBITDA of $118 million was more than double the EBITDA of $55 million for the first three months of last year, and represents an all-time high for AMG’s quarterly EBITDA.
In 000’s US dollars
Q1 ‘23
Q1 ‘22
Change
Revenue
$450,590
$403,863
12%
EBITDA (1)
118,111
54,760
116%
Cash from (used in) operating activities
93,395
(3,654)
N/A
Net income attributable to shareholders
56,221
29,115
93%
EPS – Fully diluted
1.72
0.89
93%
Return on Capital Employed
37.9%
19.8%
Note: (1) EBITDA is defined as EBIT adjusted for depreciation and amortization.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “I am pleased to announce that AMG will change its name, subject to the approval of our shareholders in the upcoming Annual General Meeting, from AMG Advanced Metallurgical Group N.V. to AMG Critical Materials N.V. We have also achieved new record earnings and operating cash flow.
This is the third straight quarter in which AMG has exceeded $100 million of EBITDA. The $63 million, or 116%, EBITDA increase over the first quarter of 2022 was driven largely by our Clean Energy Materials segment, specifically AMG Lithium and its Brazil operation with an EBITDA contribution of $92 million.
AMG’s liquidity as of March 31, 2023 was $555 million, with $360 million of unrestricted cash and $195 million of revolving credit availability. The Company will pay its final 2022 declared dividend of €0.40 per ordinary share on or around May 11, 2023, to shareholders of record on May 9, 2023.
The record results are due to our recent expansion projects. The profitability going forward is also driven by the strategic projects coming on stream in 2023 and 2024, in particular our lithium concentrate expansion and our first lithium hydroxide refinery module in Bitterfeld. We thereby confirm our guidance for 2023 to exceed $400 million in EBITDA.”
Strategic Highlights
Lithium
The lithium concentrate production expansion project in AMG Brazil is progressing as planned.
AMG Lithium’s hydroxide refinery in Bitterfeld, Germany, Europe’s first, is under construction, with commissioning for the first 20,000-ton module expected in the fourth quarter of 2023.
Regarding its development of solid state battery materials, AMG Lithium GmbH has engaged in a joint production with Fraunhofer Institute, Münster University, Wacker, and Schunk to develop next generation solid-state batteries based on lithium-sulfur technology. AMG Lithium will provide lithium sulfide and solid electrolytes for this project.
AMG has a 25% shareholding in Zinnwald Lithium PLC and is supporting the Zinnwald Board to accelerate the development of its lithium project in Eastern Germany.
Vanadium
The new vanadium spent catalyst recycling facility in Zanesville, Ohio, continues to progress, with the roaster operating at its design capacity and the melt shop targeting full production capacity later in the second quarter of this year.
AMG’s innovative lithium vanadium battery (“LIVA”) projects for industrial power management applications outlined at our Capital Markets Day are being executed as planned.
AMG has completed the expansion of its vanadium oxide (“V2O5”) production in Nuremberg, either using gasification ash or spent catalyst as alternative feed. V2O5 is increasingly destined for the LIVA battery market.
In January 2023, AMG started building a vanadium electrolyte plant at its subsidiary, AMG Titanium, in Nuremberg, Germany. The target capacity is 6,000 m³ vanadium electrolyte, which will serve the electricity storage market. Production is expected to start at the end of this year.
Shell & AMG Recycling B.V. (“SARBV”) continues to advance its projects in the Middle East including the first phase of the Supercenter project based on long-term supply agreements with ARAMCO. Front end engineering design for the first phase of the project, the conversion of gasification ash into V2O5, began in late 2022 and will be completed in the fourth quarter of 2023.
Financial Highlights
Revenue increased by 12% to $451 million in the first quarter of 2023 from $404 million in the first quarter of 2022.
EBITDA was $118 million in the first quarter of 2023, up 116% versus the first quarter 2022 EBITDA of $55 million.
Annualized return on capital employed was 37.9% for the first quarter of 2023, compared to 19.8% for the first three months of 2022.
Cash from operating activities was $93 million in the first quarter of 2023, an increase of $97 million over the same period in 2022.
Net income attributable to shareholders for the first three months of 2023 was $56 million, yielding $1.72 diluted earnings per share compared to $0.89 for the same period in 2022.
AMG’s liquidity as of March 31, 2023 was $555 million, with $360 million of unrestricted cash and $195 million of revolving credit availability.
The Company will pay its final 2022 declared dividend of €0.40 per ordinary share on or around May 11, 2023, to shareholders of record on May 9, 2023.
Key Figures
In 000’s US dollars
Q1 ‘23
Q1 ‘22
Change
Revenue
$450,590
$403,863
12%
Gross profit
139,842
75,194
86%
Gross margin
31.0%
18.6%
Operating profit
100,023
37,814
165%
Operating margin
22.2%
9.4%
Net income attributable to shareholders
56,221
29,115
93%
EPS – Fully diluted
1.72
0.89
93%
EBIT (1)
105,144
44,233
138%
EBITDA (2)
118,111
54,760
116%
EBITDA margin
26.2%
13.6%
Cash from (used in) operating activities
93,395
(3,654)
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 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
Q1 ‘23
Q1 ‘22
Change
Revenue
$219,080
$143,659
53%
Gross profit
108,957
39,004
179%
Operating profit
95,643
28,219
239%
EBITDA
106,137
37,227
185%
AMG Clean Energy Materials’ revenue increased 53% compared to the first quarter of 2022, to $219 million, driven mainly by higher prices in tantalum and lithium concentrates, as well as increased sales volumes of vanadium and tantalum concentrate.
Gross profit for the quarter increased 179% compared to the same period in the prior year, primarily due to the increased price environment.
SG&A expenses in the first quarter of 2023 were 23% higher than the same period in 2022, largely due to higher personnel costs and variable compensation expense mainly driven by the increase in headcount related to the lithium and vanadium expansion projects.
The first quarter 2023 EBITDA increased 185%, to $106 million, from $37 million in the first quarter of 2022, due to the improved gross profit as noted above.
During the first quarter of 2023, a total of 20,509 dry metric tons (“dmt”) of lithium concentrates was sold. The average realized sales price was $4,846/dmt CIF China for the quarter. The average cost per ton for the quarter was $338/dmt CIF China. This exceptional cost per ton result was driven by high sales volumes of tantalum concentrate in the quarter, and drove a quarterly EBITDA figure for AMG Brazil of $92 million.
AMG Critical Minerals
Q1 ‘23
Q1 ‘22
Change
Revenue
$62,929
$106,909
(41%)
Gross profit
7,266
13,002
(44%)
Operating profit
635
5,647
(89%)
EBITDA
2,550
7,883
(68%)
AMG Critical Minerals’ revenue for the first quarter of 2023 decreased by $44 million, or 41%, to $63 million, mainly due to lower volumes across the segment which was primarily driven by the silicon metal plant care and maintenance plan for the first two months of 2023 prior to restarting and operating one furnace in March discussed in detail below. The segment also suffered from a slowdown in the European industrial economy.
Gross profit of $7 million in the first quarter was $6 million lower compared to the first quarter of 2022, largely due to the lower volumes in the first three months of this year.
SG&A expenses in the first quarter of 2023 decreased by 3%, to $7 million, compared to the same period in 2022. This was driven by lower personnel costs and variable compensation expense in the current quarter due to the interruptions in AMG Silicon’s operations earlier this quarter.
The first quarter 2023 EBITDA decreased 68% compared to the same period in 2022, to $3 million, due to the lower gross profit as noted above.
As of March 1, 2023, AMG’s silicon metal plant in Pocking, Germany, restarted operating one furnace. AMG Silicon is operating one furnace throughout the second quarter and plans to operate one furnace in the third quarter. The operational parameters of the silicon business will continue to be reviewed on an ongoing basis and will be adjusted as appropriate in line with favorable and predictable market conditions. Due to the noted interruptions in silicon operations, the financial impact of the business will be excluded from EBITDA during this period of abnormal operations. However, AMG Silicon generated $11 million in cash flow from operating activities during the quarter driven by the receipt of energy sales made in the fourth quarter of 2022. The financial impact of the care and maintenance program does not significantly impact AMG’s overall projected 2023 financial results.
AMG Critical Materials Technologies
Q1 ‘23
Q1 ‘22
Change
Revenue
$168,581
$153,295
10%
Gross profit
23,619
23,188
2%
Operating profit
3,745
3,948
(5%)
EBITDA
9,424
9,650
(2%)
AMG Critical Materials Technologies’ first quarter 2023 revenue increased by $15 million, or 10%, compared to the same period in 2022. This improvement was driven by higher sales volumes of titanium alloys and chrome metal.
SG&A expenses increased by 3% in the first quarter of 2023 compared to the same period in 2022, due to an increase in personnel costs and higher variable compensation expense in the current quarter.
AMG Critical Materials Technologies’ EBITDA was $9 million during the quarter compared to $10 million in the same period of 2022. The slight decrease was due to lower sequential chrome prices in the first quarter, partially offset by stronger profitability from our Engineering business.
AMG Engineering signed $76 million in new orders during the first quarter of 2023, driven by strong orders of remelting, turbine blade and heat treatment furnaces, representing a 1.21x book to bill ratio. Order backlog was $237 million as of March 31, 2023, the highest since March 31, 2020.
Financial Review
Tax
AMG recorded an income tax expense of $36 million in the first quarter of 2023, compared to a tax benefit of $1 million in the first quarter of 2022. This variance was mainly driven by higher profitability in AMG Lithium at its Brazil operation coupled with movements in the Brazilian real. The effects of the Brazilian real caused a $2 million tax expense in the first three months of 2023, compared to a $15 million benefit in the same period in 2022. 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 $21 million in the first quarter of 2023, compared to tax payments of $4 million in the first quarter of 2022. The higher cash payments this quarter were largely a result of higher profitability in Brazil.
Exceptional Items
AMG’s first quarter 2023 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 2023 and 2022 are below:
Exceptional items included in gross profit
Q1 ‘23
Q1 ‘22
Change
Gross profit
$139,842
$75,194
86%
Inventory cost adjustment
510
—
N/A
Restructuring (reversal) expense
(263)
141
N/A
Asset impairment reversal
(767)
—
N/A
Silicon’s partial closure
(156)
—
N/A
Strategic project (reversal) expense
(51)
2,265
N/A
Gross profit excluding exceptional items
139,115
77,600
79%
The asset impairment reversal during the first quarter of 2023 was due to an insurance recovery on previously impaired machinery and equipment.
SG&A
AMG’s first quarter 2023 SG&A expenses were $40 million compared to $37 million in the first quarter of 2022, with the increase largely attributable to higher personnel costs and variable compensation expense mainly driven by the increase in headcount related to the lithium and vanadium expansion projects in our Clean Energy Materials segment.
Liquidity
March 31, 2023
December 31, 2022
Change
Senior secured debt
$339,061
$348,622
(3%)
Cash & cash equivalents
359,525
346,043
4%
Senior secured net (cash) debt
(20,464)
2,579
N/A
Other debt
14,801
14,959
(1%)
Net (cash) debt excluding municipal bond
(5,663)
17,538
N/A
Municipal bond debt
319,185
319,244
—%
Restricted cash
2,911
6,920
(58%)
Net debt
310,611
329,862
(6%)
AMG ended the quarter in a $311 million net debt position. This decrease versus year-end 2022 was mainly due to $10 million of debt repayment and higher unrestricted cash of $14 million, offset by the utilization of restricted cash associated with the municipal bond.
AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the first quarter. As of March 31, 2023, the Company had $360 million in unrestricted cash and cash equivalents and $195 million available on its revolving credit facility. As such, AMG had $555 million of total liquidity as of March 31, 2023.
Net Finance Costs
AMG’s first quarter 2023 net finance cost was $7 million compared to $9 million in the first quarter of 2022. This variance was mainly driven by foreign exchange gains of $2 million during the quarter primarily due to non-cash intergroup balances.
AMG capitalized $2 million of interest costs in the first quarter of 2023 versus $4 million in the same period in 2022. This decrease is mainly driven by the interest associated with the expansion projects in AMG Lithium and Brazil operations compared to a higher capitalized interest associated with the Company’s tax-exempt municipal bond supporting the vanadium expansion in Ohio in prior year.
Outlook
AMG reaffirms its guidance for the full year 2023 to exceed $400 million EBITDA.
Regarding AMG’s 5-year guidance, the outstanding progress we have made with our strategic growth projects and given the compelling long-term supply and demand dynamics in the lithium market, we are issuing new guidance to achieve $650 million EBITDA, or more, in 5 years or earlier.
Profit for the period to adjusted EBITDA reconciliation
Q1 ‘23
Q1 ‘22
Profit for the period
$56,447
$29,884
Income tax expense (benefit)
35,927
(1,489)
Net finance cost
6,617
8,919
Equity-settled share-based payment transactions
1,469
1,380
Restructuring (reversal) expense
(263)
141
Silicon’s partial closure
547
—
Inventory cost adjustment
510
—
Asset impairment reversal
(767)
—
Strategic project expense (1)
3,625
4,796
Share of loss of associates
1,032
500
Others
—
102
EBIT
105,144
44,233
Depreciation and amortization
12,967
10,527
EBITDA
118,111
54,760
Notes: (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 March 31
In thousands of US dollars
2023
2022
Unaudited
Unaudited
Continuing operations
Revenue
450,590
403,863
Cost of sales
(310,748)
(328,669)
Gross profit
139,842
75,194
Selling, general and administrative expenses
(40,360)
(37,462)
Other income, net
541
82
Net other operating income
541
82
Operating profit
100,023
37,814
Finance income
5,476
299
Finance cost
(12,093)
(9,218)
Net finance cost
(6,617)
(8,919)
Share of loss of associates and joint ventures
(1,032)
(500)
Profit before income tax
92,374
28,395
Income tax (expense) benefit
(35,927)
1,489
Profit for the period
56,447
29,884
Profit attributable to:
Shareholders of the Company
56,221
29,115
Non-controlling interests
226
769
Profit for the period
56,447
29,884
Earnings per share
Basic earnings per share
1.76
0.91
Diluted earnings per share
1.72
0.89
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
In thousands of US dollars
March 31, 2023 Unaudited
December 31, 2022
Assets
Property, plant and equipment
833,444
797,611
Goodwill and other intangible assets
41,757
41,404
Derivative financial instruments
28,015
33,042
Other investments
46,213
29,324
Deferred tax assets
36,813
37,181
Restricted cash
1,860
5,875
Other assets
9,245
8,612
Total non-current assets
997,347
953,049
Inventories
266,214
277,311
Derivative financial instruments
2,951
3,516
Trade and other receivables
189,983
162,548
Other assets
116,434
121,834
Current tax assets
7,912
7,289
Restricted cash
1,051
1,045
Cash and cash equivalents
359,525
346,043
Total current assets
944,070
919,586
Total assets
1,941,417
1,872,635
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
(continued)
In thousands of US dollars
March 31, 2023 Unaudited
December 31, 2022
Equity
Issued capital
853
853
Share premium
553,715
553,715
Treasury shares
(10,730)
(14,685)
Other reserves
(43,449)
(44,869)
Retained earnings (deficit)
60,898
(4,461)
Equity attributable to shareholders of the Company
561,287
490,553
Non-controlling interests
34,376
27,296
Total equity
595,663
517,849
Liabilities
Loans and borrowings
660,246
661,270
Lease liabilities
44,020
44,224
Employee benefits
118,734
117,160
Provisions
12,512
12,361
Deferred revenue
20,000
20,000
Other liabilities
4,157
15,009
Derivative financial instruments
171
284
Deferred tax liabilities
25,777
27,269
Total non-current liabilities
885,617
897,577
Loans and borrowings
5,948
15,164
Lease liabilities
4,720
4,710
Short-term bank debt
6,853
6,391
Deferred revenue
37,719
28,277
Other liabilities
68,572
69,917
Trade and other payables
231,407
240,101
Derivative financial instruments
4,705
7,746
Advance payments from customers
44,446
51,054
Current tax liability
41,343
23,548
Provisions
14,424
10,301
Total current liabilities
460,137
457,209
Total liabilities
1,345,754
1,354,786
Total equity and liabilities
1,941,417
1,872,635
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
For the quarter ended March 31
In thousands of US dollars
2023
2022
Unaudited
Unaudited
Cash from (used in) operating activities
Profit for the period
56,447
29,884
Adjustments to reconcile net profit to net cash flows:
Non-cash:
Income tax expense (benefit)
35,927
(1,489)
Depreciation and amortization
12,967
10,527
Asset impairment reversal
(767)
—
Net finance cost
6,617
8,919
Share of loss of associates and joint ventures
1,032
500
Loss (gain) on sale or disposal of property, plant and equipment
9
(55)
Equity-settled share-based payment transactions
1,469
1,380
Movement in provisions, pensions, and government grants
2,755
(1,685)
Working capital and deferred revenue adjustments
4,905
(41,819)
Cash generated from operating activities
121,361
6,162
Finance costs paid, net
(7,012)
(5,917)
Income tax paid
(20,954)
(3,899)
Net cash from (used in) operating activities
93,395
(3,654)
Cash used in investing activities
Proceeds from sale of property, plant and equipment
—
59
Acquisition of property, plant and equipment and intangibles
(44,718)
(43,763)
Investments in associates and joint ventures
(17,500)
(500)
Use of restricted cash
4,009
31,295
Interest received on restricted cash
19
9
Capitalized borrowing cost paid
(5,739)
(7,886)
Other
3
8
Net cash used in investing activities
(63,926)
(20,778)
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
2023
2022
Unaudited
Unaudited
Cash used in financing activities
Proceeds from issuance of debt
423
1,835
Repayment of borrowings
(10,750)
(1,718)
Net repurchase of common shares
(6,672)
(1,523)
Payment of lease liabilities
(1,316)
(1,291)
Net cash used in financing activities
(18,315)
(2,697)
Net increase (decrease) in cash and cash equivalents
11,154
(27,129)
Cash and cash equivalents at January 1
346,043
337,877
Effect of exchange rate fluctuations on cash held
2,328
(2,266)
Cash and cash equivalents at March 31
359,525
308,482
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 3,600 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, 23March 2023(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) is pleased to announce that Zinnwald Lithium Plc (“Zinnwald”) (ZNWD, AIM) will issue 118,996,738 newly issued ordinary shares to AMG for a total subscription amount of £12,387,560.40 resulting in a 25.13% shareholding.
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 Zinnwald
Zinnwald is an AIM quoted, lithium development company focused on becoming an important supplier to Europe’s fast-growing battery sector. The Company owns the integrated Zinnwald Lithium Project in Germany, a development-stage project with attractive economics and approved mining licence. A PEA published in September 2022, highlighted the positive economics of the Project with a Pre-tax NPV8 of US$1,605m, IRR of 39.0%, $192m EBITDA and a payback of just 3.3 years. The Project is located in the heart of Europe’s chemical and automotive industries and has the potential to be one of Europe’s more advanced battery grade lithium projects.
About AMG
AMG’s mission is to provide critical materials and related process technologies to advance a less carbon-intensive world. To this end, AMG is focused on the production and development of energy storage materials such as lithium, vanadium, and tantalum. In addition, AMG’s products include highly engineered systems to reduce CO2 in aerospace engines, as well as critical materials addressing CO2 reduction in a variety of other end use 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 3,400 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, 22March 2023(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) is pleased to announce that it has agreed with Zinnwald Lithium Plc (“Zinnwald”) (ZNWD, AIM) to subscribe for up to 124 million newly issued ordinary shares as a cornerstone investor to Zinnwald’s accelerated book build. The shares will be subscribed for at a 10% premium to the 20-day Volume Weighted Average Price (“VWAP”) as of the close of market on March 20, 2023, that is, a price of 10.41 pence per share. Upon admission of the newly issued ordinary shares, expected on March 29, AMG will become a 25% shareholder of Zinnwald.
Dr. Heinz Schimmelbusch, AMG’s CEO, commented, “AMG’s investment in Zinnwald is a valuable strategic opportunity. As a partner with Zinnwald, together we will pursue a definitive feasibility study for their project in Eastern Germany. Establishing a raw material base in Germany close to our Bitterfeld operations has obvious logistical and strategic benefits for AMG, and we look forward to working with Zinnwald on this exciting project.”
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 Zinnwald
Zinnwald is an AIM quoted, lithium development company focused on becoming an important supplier to Europe’s fast-growing battery sector. The Company owns the integrated Zinnwald Lithium Project in Germany, a development-stage project with attractive economics and approved mining licence. A PEA published in September 2022, highlighted the positive economics of the Project with a Pre-tax NPV8 of US$1,605m, IRR of 39.0%, $192m EBITDA and a payback of just 3.3 years. The Project is located in the heart of Europe’s chemical and automotive industries and has the potential to be one of Europe’s more advanced battery grade lithium projects.
About AMG
AMG’s mission is to provide critical materials and related process technologies to advance a less carbon-intensive world. To this end, AMG is focused on the production and development of energy storage materials such as lithium, vanadium, and tantalum. In addition, AMG’s products include highly engineered systems to reduce CO2 in aerospace engines, as well as critical materials addressing CO2 reduction in a variety of other end use 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 3,400 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, 22 February 2023(Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported fourth quarter 2022 revenue of $390 million, an 18% increase versus the fourth quarter of 2021. Fourth quarter 2022 EBITDA of $104 million was more than double the fourth quarter of 2021, and drove AMG to a record-setting full year EBITDA of $343 million.
In 000’s US dollars
FY ‘22
FY ‘21
Change
Revenue
$1,642,774
$1,204,666
36%
EBITDA (1)
342,550
136,676
151%
Cash from operating activities
167,567
90,788
85%
Net income attributable to shareholders
187,589
13,771
EPS – Fully diluted
5.73
0.44
Return on Capital Employed
30.8%
11.9%
Note:
(1) EBITDA is defined as EBIT adjusted for depreciation and amortization.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “AMG’s full year 2022 EBITDA, revenue, gross profit, operating cash flows, return on capital employed, and net income were the highest in the company’s history by significant margins. This result is due to the AMG Clean Energy Materials segment, specifically AMG Lithium and its Brazil operation with an EBITDA contribution of $215 million, or 63% of the total EBITDA for the year. Moreover, AMG exceeded $100 million of EBITDA for the second straight quarter. EBITDA for the fourth quarter of 2022 was $104 million compared to $44 million in the fourth quarter of 2021, an increase of $60 million, or 137%. Our Enabling CO2 Reduction Portfolio (ECO2RP) in 2022 enabled 99.4 million tons of CO2 reduction, 26% more than the 79.0 million tons of enabled CO2 reduction in 2021.”
Outlook
AMG reaffirms its guidance for the full year 2023 to exceed $400 million EBITDA.
AMG anticipates the Company will increase overall staffing from about 3,400 at the end of 2022 by 5% due to the hiring associated with the ramp-up of the vanadium expansion in Ohio and the lithium expansion in Germany.
Capital expenditures for 2023 are expected to be between $175 million and $200 million, mainly driven by the lithium concentrate expansion in Brazil and expenditures related to the construction of the lithium hydroxide plant in Germany.
With regard to financing in 2023, AMG refinanced its $350 million term loan and $200 million revolver in November 2021, extending revolver and term loan maturities to 2026 and 2028, respectively. AMG has no significant near-term debt maturities. And although we look to consistently optimize our financial structure, our current liquidity of $532 million can fully fund all of the approved capital expansion projects and all other financial obligations.
In addition, we reaffirm our two-pronged commitment to reduce our CO2 emissions and increase our enabled CO2 savings through 2030.
Strategic Highlights
Lithium
The spodumene production expansion project in AMG Brazil is progressing. The project will solidify AMG’s low-cost position. 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 has signed a non-binding memorandum of understanding with FREYR Battery, the basis of which is for AMG Lithium to supply FREYR between 3,000 to 5,000 tons per annum of battery-grade lithium hydroxide.
AMG Brazil, JX Nippon Mining & Metals Corporation (“JXNMM”) and TANIOBIS GmbH announced a strategic partnership in December 2022 for the production and supply of tantalum concentrate from AMG’s Mibra Mine 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 sold to TANIOBIS, providing long-term stability in tantalum sales and corresponding by-product credits to lithium production costs for AMG Brazil.
Vanadium
AMG finalized the completion of the new vanadium spent catalyst recycling facility in Zanesville, Ohio. Operations began on October 29, 2022, and we are targeting full production capacity in the second quarter of 2023.
Shell & AMG Recycling B.V. (“SARBV”) is advancing its projects in the Middle East, in particular the first phase of the Supercenter project based on long-term supply agreements with Saudi Arabian Oil Company (“Aramco”). Plant design optimization, site selection and permitting activities are progressing and the FEL3 partnering with Hatch began in December 2022.
AMG LIVA put its first industrial battery – the Hybrid Energy Storage System (“HESS”) – into fully automatic operation mode in AMG Graphite’s plant in Hauzenberg in November 2022.
AMG LIVA sold its first HESS to a third party in December 2022 to Wipotec GmbH, a leading global provider of intelligent weighing and inspection technology located in Southern Germany. The battery will be integrated into the facility’s power system.
In January 2023, AMG approved building a vanadium electrolyte plant at its subsidiary, AMG Titanium, in Nuremberg, Germany. The target capacity is 6,000 m³ vanadium electrolyte. Basic engineering for the plant was completed in November, CAPEX is expected to be $15 million, and production is expected to start at the end of 2023.
Financial Highlights
Revenue increased by 18% to $390 million in the fourth quarter of 2022 from $330 million in the fourth quarter of 2021. On a full year basis, revenue increased by 36%.
EBITDA was $104 million in the fourth quarter of 2022, up 137% versus the fourth quarter 2021 EBITDA of $44 million. Full year EBITDA of $343 million is 151% higher than the prior year.
Annualized return on capital employed was 30.8% for 2022, more than double the 11.9% for 2021.
Cash flow from operations was $168 million for full year 2022, compared to $91 million in 2021, driven by the high profitability of AMG Lithium in Brazil.
Net income attributable to shareholders for full year 2022 was $188 million, yielding $5.73 diluted earnings per share compared to $0.44 in 2021.
AMG’s liquidity as of December 31, 2022 was $532 million, with $346 million of unrestricted cash and $186 million of revolving credit availability.
The total 2022 dividend proposed is €0.70 per ordinary share, including the interim dividend of €0.30, paid on August 10, 2022.
Key Figures
In 000’s US dollars
Q4 ‘22
Q4 ‘21
Change
FY ‘22
FY ‘21
Change
Revenue
$390,004
$330,360
18%
$1,642,774
$1,204,666
36%
Gross profit
119,981
61,797
94%
409,486
208,243
97%
Gross margin
30.8%
18.7%
24.9%
17.3%
Operating profit
82,319
22,295
269%
307,059
57,141
437%
Operating margin
21.1%
6.7%
18.7%
4.7%
Net income attributable to shareholders
60,697
5,705
964%
187,589
13,771
1,262%
EPS – Fully diluted
1.85
0.18
928%
5.73
0.44
1,202%
EBIT (1)
91,719
32,678
181%
297,251
92,991
220%
EBITDA (2)
104,061
43,885
137%
342,550
136,676
151%
EBITDA margin
26.7%
13.3%
20.9%
11.3%
Cash from
operating activities
56,969
30,225
88%
167,567
90,788
85%
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
Q4 ‘22
Q4 ‘21
Change
FY ‘22
FY ‘21
Change
Revenue
$176,065
$115,405
53%
$667,804
$381,475
75%
Gross profit
81,583
27,950
192%
267,862
75,095
257%
Gross profit before
non-recurring items
82,784
29,038
185%
273,417
80,264
241%
Operating profit
69,779
16,301
328%
222,590
22,476
890%
EBITDA
80,347
25,753
212%
259,480
66,622
289%
AMG Clean Energy Materials’ revenue increased 53% compared to the fourth quarter of 2021, to $176 million, driven mainly by higher prices in vanadium, tantalum and lithium concentrates, as well as increased sales volumes of vanadium and tantalum concentrate. The higher prices and volumes in 2022 propelled revenue for the segment 75% higher than in 2021.
Gross profit before non-recurring items for the quarter increased 185% compared to the same period in the prior year. The segment’s full year 2022 gross profit before non-recurring items grew 241% compared to 2021, primarily due to the increased price environment.
SG&A expenses in the fourth quarter of 2022 were in line with the same period in 2021 at $12 million. Full year 2022 SG&A expenses were 11% higher than in 2021, largely due to increased professional fees associated with strategic projects during 2022 offset by lower share-based compensation.
The fourth quarter 2022 EBITDA increased 212%, to $80 million, from $26 million in the fourth quarter of 2021, due to the improved gross profit as noted above. The segment’s full year 2022 EBITDA of $259 million was 289% higher than the 2021 EBITDA, largely driven by the lithium business. Vanadium profitability was impacted in the fourth quarter of 2022 by a sequential drop in index prices of 16% from the third quarter and the impact of start-up costs for Zanesville.
During the fourth quarter of 2022, a total of 21,329 dry metric tons (“dmt”) of spodumene was sold. The average realized sales price was $3,682/dmt CIF China for the quarter. The average cost per ton for the quarter was $228/dmt CIF China. This exceptional cost per ton result was driven by high sales volumes of tantalum concentrate in the quarter, and drove a quarterly EBITDA figure for AMG Brazil of $73 million.
For the full year 2022, a total of 86,713 dmt of spodumene was sold. The average realized sales price was $2,805/dmt CIF China and the average cost per ton for the full year was $461/dmt CIF China. Total EBITDA for AMG Brazil was $215 million.
AMG Critical Minerals
Q4 ‘22
Q4 ‘21
Change
FY ‘22
FY ‘21
Change
Revenue
$69,242
$79,422
(13%)
$364,502
$308,523
18%
Gross profit
19,017
11,189
70%
46,721
48,735
(4%)
Gross profit before
non-recurring items
18,641
11,379
64%
57,928
48,690
19%
Operating profit
10,961
2,584
324%
63,995
20,181
217%
EBITDA
14,001
6,459
117%
38,280
31,200
23%
AMG Critical Minerals’ revenue for the fourth quarter of 2022 decreased by $10 million, or 13%, to $69 million, mainly due to lower volumes across the segment. On a full year basis, revenue increased by 18% compared to 2021.
Gross profit before non-recurring items of $19 million in the fourth quarter was 64% higher compared to the fourth quarter of 2021. The segment’s full year 2022 gross profit before non-recurring items was 19% higher than in 2021, largely driven by the improved price environment and favorable energy contracts for silicon production in the fourth quarter.
SG&A expenses in the fourth quarter of 2022 decreased by 20%, to $7 million, compared to the same period in 2021. This was largely driven by lower share-based compensation expense in the current quarter associated with a reversal recorded in the prior year. Full year 2022 SG&A expenses were slightly lower than 2021 by $0.6 million.
The fourth quarter 2022 EBITDA increased 117% compared to the same period in 2021, to $14 million, due to improved gross profit as noted above and favorable energy contracts at AMG Silicon in the quarter. Improved prices during 2022 led to a 23% increase in full year EBITDA for the segment compared to 2021.
Effective January 1, 2023, AMG placed its silicon metal plant in Pocking, Germany, on care and maintenance. The plant will restart and operate one furnace in March of 2023. The operational parameters of the silicon business will continue to be reviewed on an ongoing basis and will be adjusted as appropriate in line with favorable and predictable market conditions. Due to the noted interruptions in silicon operations, the financial impact of the business will be excluded from EBITDA during this period of abnormal operations. The financial impact of the care and maintenance program does not significantly impact AMG’s overall projected 2023 financial results.
AMG Critical Materials Technologies
Q4 ‘22
Q4 ‘21
Change
FY ‘22
FY ‘21
Change
Revenue
$144,697
$135,533
7%
$610,468
$514,668
19%
Gross profit
19,381
22,658
(14%)
94,903
84,413
12%
Gross profit before
non-recurring items
20,745
22,388
(7%)
96,449
84,309
14%
Operating profit
1,579
3,410
(54%)
20,474
14,484
41%
EBITDA
9,713
11,673
(17%)
44,790
38,854
15%
AMG Critical Materials Technologies’ fourth quarter 2022 revenue increased by $9 million, or 7%, compared to the same period in 2021. This improvement was driven by higher sales volumes of titanium aluminides and higher prices for chrome metal. Full year 2022 revenue was 19% higher than the prior year and gross profit before non-recurring items for 2022 of $96 million was 14% higher than the $84 million in 2021, due largely to the improved price environment versus the prior year associated with the continued recovery of the aerospace market post pandemic.
During the first half of the year, market disruptions associated with the Russian invasion of Ukraine impacted the chrome metal supply chain, creating a dramatic increase in the price of raw materials and limited availability. To protect against operational interruptions, the Company secured additional raw material volumes at market conditions at fixed prices. In the fourth quarter, the disruptions to the supply chain were alleviated and the prices fell dramatically. This resulted in the company’s chrome margins being negatively impacted in the fourth quarter and an inventory write-down of $1.6 million.
SG&A expenses decreased by 7% in the fourth quarter of 2022 compared to the same period in 2021, due to lower share-based expense in the current quarter associated with a reversal in the prior year.
AMG Critical Materials Technologies’ EBITDA was $10 million during the quarter compared to $12 million in the same period of 2021. The decrease is due to the chrome market dislocation noted above, offset by stronger profitability from our Engineering business. Full year 2022 EBITDA for the segment of $45 million was 15% higher than 2021. This was primarily due to the continued recovery in the aerospace sector in 2022.
AMG Engineering signed $67 million in new orders during the fourth quarter of 2022, driven by strong orders of turbine blade and induction furnaces, representing a 1.28x book to bill ratio. In January 2023, the Company’s strong order intake continued with $44 million in new orders, mainly due to turbine blade coater sales. Order backlog was $220 million as of December 31, 2022, the highest since March 31, 2020.
Financial Review
Tax
AMG recorded an income tax expense of $84 million in 2022, compared to $9 million in 2021. This variance was mainly driven by enhanced operating results in AMG Lithium at its Brazil operation coupled with movements in the Brazilian real. The effects of the Brazilian real caused a $7 million benefit in 2022, compared to a $4 million tax benefit in 2021. 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 $42 million in 2022, compared to tax payments of $10 million in 2021. The higher cash payments in 2022 were largely a result of improved operating results.
Exceptional Items
AMG’s fourth quarter and full year 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 2022 and 2021 are below:
Exceptional items included in gross profit
Q4 ‘22
Q4 ‘21
Change
FY ‘22
FY ‘21
Change
Gross profit
$119,981
$61,797
94%
$409,486
$208,243
97%
Inventory cost adjustment
1,589
—
N/A
1,589
1,164
37%
Restructuring expense (reversal)
389
(140)
N/A
582
522
11%
Asset impairment (reversal) expense
(990)
153
N/A
10,597
(711)
N/A
Strategic project expense
1,201
1,501
(20%)
5,540
4,045
37%
Others
—
(506)
N/A
—
—
N/A
Gross profit excluding exceptional items
122,170
62,805
95%
427,794
213,263
101%
Energy Costs
Total energy costs were $16 million higher in 2022 versus 2021 due to the increases in gas and electricity costs during the year. 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 fourth quarter 2022 SG&A expenses were $37 million compared to $40 million in the fourth quarter of 2021, with the decrease due to lower share-based compensation expense associated with a reversal in the prior year.
Full year 2022 SG&A expenses were $148 million, 6% higher than in 2021, with the variance due to increased professional fees associated with strategic projects during the current period, offset by lower share-based compensation expense.
Liquidity
December 31, 2022
December 31, 2021
Change
Senior secured debt
$348,622
$371,897
(6%)
Cash & cash equivalents
346,043
337,877
2%
Senior secured net debt
2,579
34,020
(92%)
Other debt
14,959
24,398
(39%)
Net debt excluding municipal bond
17,538
58,418
(70%)
Municipal bond debt
319,244
319,476
—%
Restricted cash
6,920
93,434
(93%)
Net debt
329,862
284,460
16%
AMG ended the year in a $330 million net debt position. This increase was mainly due to the significant investment in growth initiatives during the year, particularly at our Zanesville facility, which utilized the restricted cash associated with the municipal bond. This use of restricted cash was offset by $34 million of debt repayment and higher unrestricted cash.
AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the fourth quarter. As of December 31, 2022, the Company had $346 million in unrestricted cash and cash equivalents and $186 million available on its revolving credit facility. As such, AMG had $532 million of total liquidity as of December 31, 2022.
Net Finance Costs
AMG’s fourth quarter 2022 net finance income was $4 million compared to a cost of $13 million in the fourth quarter of 2021. This variance was mainly driven by foreign exchange gains of $10 million during the quarter primarily due to non-cash intergroup balances.
AMG capitalized $1 million of interest costs in the fourth 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.
Final Dividend Proposal
AMG intends to declare a dividend of €0.70 per ordinary share over the financial year 2022. The interim dividend of €0.30, paid on August 10, 2022, will be deducted from the amount to be distributed to shareholders. The proposed final dividend per ordinary share therefore amounts to €0.40.
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 4, 2023. Profit for the period to adjusted EBITDA reconciliation
Q4 ‘22
Q4 ‘21
FY ‘22
FY ‘21
Profit for the period
$62,669
$4,139
$190,771
$13,779
Income tax expense
23,827
5,293
84,097
8,707
Net finance (income) cost
(4,177)
12,644
30,941
33,602
Equity-settled share-based payment transactions
1,414
6,883
5,552
10,206
Restructuring expense (reversal)
389
(140)
582
522
Net contract settlements (1)
971
—
(45,436)
—
Inventory cost adjustment
1,589
—
1,589
1,164
Asset impairment (reversal) expense (1)
(990)
153
10,597
(711)
Environmental provision
143
230
133
11,941
Strategic project expense (2)
5,885
3,769
17,070
12,157
Share of loss of associates
—
219
1,250
1,053
Others
(1)
(512)
105
571
EBIT
91,719
32,678
297,251
92,991
Depreciation and amortization
12,342
11,207
45,299
43,685
EBITDA
104,061
43,885
342,550
136,676
Notes:
(1) Associated with the silicon metal shutdown, AMG recorded income from the sale of an existing supply contract which positively impacted operating profit for the year. This income was offset by a settlement with a major customer and an impairment of existing assets.
(2) 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.
Consolidated Income Statement
For the quarter ended December 31
In thousands of US dollars
2022
2021
Unaudited
Unaudited
Continuing operations
Revenue
390,004
330,360
Cost of sales
(270,023)
(268,563)
Gross profit
119,981
61,797
Selling, general and administrative expenses
(36,579)
(39,501)
Environmental expense
(143)
(230)
Other expenses
(940)
—
Other income
—
229
Net other operating expense
(1,083)
(1)
Operating profit
82,319
22,295
Finance income
5,459
1,107
Finance cost
(1,282)
(13,751)
Net finance income (cost)
4,177
(12,644)
Share of loss of associates and joint ventures
—
(219)
Profit before income tax
86,496
9,432
Income tax expense
(23,827)
(5,293)
Profit for the period
62,669
4,139
Profit attributable to:
Shareholders of the Company
60,697
5,705
Non-controlling interests
1,972
(1,566)
Profit for the period
62,669
4,139
Earnings per share
Basic earnings per share
1.90
0.18
Diluted earnings per share
1.85
0.18
AMG Advanced Metallurgical Group N.V.
Consolidated Income Statement
For the year ended December 31
In thousands of US dollars
2022
2021
Unaudited
Continuing operations
Revenue
1,642,774
1,204,666
Cost of sales
(1,233,288)
(996,423)
Gross profit
409,486
208,243
Selling, general and administrative expenses
(147,963)
(139,576)
Environmental expense
(133)
(11,941)
Other expenses
(14,411)
—
Other income
60,080
415
Net other operating income (expense)
45,536
(11,526)
Operating profit
307,059
57,141
Finance income
9,061
1,938
Finance cost
(40,002)
(35,540)
Net finance cost
(30,941)
(33,602)
Share of loss of associates and joint ventures
(1,250)
(1,053)
Profit before income tax
274,868
22,486
Income tax expense
(84,097)
(8,707)
Profit for the period
190,771
13,779
Profit attributable to:
Shareholders of the Company
187,589
13,771
Non-controlling interests
3,182
8
Profit for the period
190,771
13,779
Earnings per share
Basic earnings per share
5.87
0.44
Diluted earnings per share
5.73
0.44
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Financial Position
In thousands of US dollars
December 31, 2022 Unaudited
December 31, 2021
Assets
Property, plant and equipment
797,611
693,624
Goodwill and other intangible assets
41,404
44,684
Derivative financial instruments
33,042
95
Other investments
29,324
29,830
Deferred tax assets
37,181
52,937
Restricted cash
5,875
85,023
Other assets
8,612
8,471
Total non-current assets
953,049
914,664
Inventories
277,311
218,320
Derivative financial instruments
3,516
4,056
Trade and other receivables
162,548
145,435
Other assets
121,834
65,066
Current tax assets
7,289
5,888
Restricted cash
1,045
8,411
Cash and cash equivalents
346,043
337,877
Total current assets
919,586
785,053
Total assets
1,872,635
1,699,717
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Financial Position
(continued)
In thousands of US dollars
December 31, 2022 Unaudited
December 31, 2021
Equity
Issued capital
853
853
Share premium
553,715
553,715
Treasury shares
(14,685)
(16,596)
Other reserves
(44,869)
(96,421)
Retained earnings (deficit)
(4,461)
(173,117)
Equity attributable to shareholders of the Company
490,553
268,434
Non-controlling interests
27,296
25,718
Total equity
517,849
294,152
Liabilities
Loans and borrowings
661,270
675,384
Lease liabilities
44,224
45,692
Employee benefits
117,160
162,628
Provisions
12,361
14,298
Deferred revenue
20,000
22,341
Other liabilities
15,009
11,098
Derivative financial instruments
284
2,064
Deferred tax liabilities
27,269
5,617
Total non-current liabilities
897,577
939,122
Loans and borrowings
15,164
27,341
Lease liabilities
4,710
4,857
Short-term bank debt
6,391
13,046
Deferred revenue
28,277
18,478
Other liabilities
69,917
80,672
Trade and other payables
240,101
252,765
Derivative financial instruments
7,746
6,010
Advance payments from customers
51,054
35,091
Current tax liability
23,548
10,586
Provisions
10,301
17,597
Total current liabilities
457,209
466,443
Total liabilities
1,354,786
1,405,565
Total equity and liabilities
1,872,635
1,699,717
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Cash Flows
For the year ended December 31
In thousands of US dollars
2022
2021
Unaudited
Cash from operating activities
Profit for the period
190,771
13,779
Adjustments to reconcile net profit to net cash flows:
Non-cash:
Income tax expense
84,097
8,707
Depreciation and amortization
45,299
43,685
Asset impairment expense (reversal)
10,597
(711)
Net finance cost
30,941
33,602
Share of loss of associates and joint ventures
1,250
1,053
Gain on sale or disposal of property, plant and equipment
(592)
(65)
Equity-settled share-based payment transactions
5,552
10,028
Movement in provisions, pensions, and government grants
(11,982)
(10,184)
Working capital and deferred revenue adjustments1
(123,281)
22,747
Cash generated from operating activities
232,652
122,641
Finance costs paid, net
(23,289)
(21,950)
Income tax paid
(41,796)
(9,903)
Net cash from operating activities
167,567
90,788
Cash used in investing activities
Proceeds from sale of property, plant and equipment
2,538
1,029
Acquisition of property, plant and equipment and intangibles
(174,516)
(162,240)
Acquisitions of subsidiaries
—
(458)
Investments in associates and joint ventures
(1,250)
(1,000)
Use of restricted cash
86,514
115,485
Interest received on restricted cash
250
39
Capitalized borrowing cost paid
(16,652)
(15,838)
Other
12
30
Net cash used in investing activities
(103,104)
(62,953)
(1) Includes outstanding receivables related to silicon energy credits.
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Cash Flows
(continued)
For the year ended December 31
In thousands of US dollars
2022
2021
Unaudited
Cash (used in) from financing activities
Proceeds from issuance of debt
82
352,152
Payment of transaction costs related to debt
—
(7,630)
Repayment of borrowings
(33,863)
(342,781)
Proceeds from issuance of common shares
—
123,627
Net repurchase of common shares
(1,523)
(2,058)
Dividends paid
(19,885)
(7,598)
Payment of lease liabilities
(5,101)
(5,313)
Advanced contributions
11,000
—
Contributions by non-controlling interests
—
667
Net cash (used in) from financing activities
(49,290)
111,066
Net increase in cash and cash equivalents
15,173
138,901
Cash and cash equivalents at January 1
337,877
207,366
Effect of exchange rate fluctuations on cash held
(7,007)
(8,390)
Cash and cash equivalents at December 31
346,043
337,877
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 3,400 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, 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.