AMG Reports Record-Setting Earnings for the Full Year 2023

Feb 21, 2024

Amsterdam, 21 February 2024 (Regulated Information) — AMG Critical Materials N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported record-setting adjusted EBITDA $350 million in 2023, due largely to strong profitability in our lithium and vanadium businesses. Fourth quarter 2023 revenue was $367 million, a 6% decrease versus the fourth quarter of 2022. Fourth quarter 2023 adjusted EBITDA of $71 million decreased 32% compared to the fourth quarter of 2022.

Cash from operating activities was $223 million in 2023, the highest in AMG’s history, and 33% higher than the $168 million in 2022.

_{Note:
(1)   Adjusted EBITDA is defined as EBIT adjusted for depreciation and amortization.}

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “AMG has achieved the highest adjusted EBITDA in its 16 year history with $350 million for the full year 2023. Market conditions for all products within our portfolio substantially weakened as the year progressed. The 32% decrease in adjusted EBITDA compared to the fourth quarter of 2022 was driven in large part by the global decline in metal prices within our portfolio, predominantly the lithium price decline. The average quarterly prices of lithium carbonate and ferrovanadium decreased over 76% and 26%, respectively, versus the average pricing in the fourth quarter of 2022.

Cash from operating activities was $223 million in 2023, the highest in AMG’s history, and 33% higher than the $168 million in 2022. We were $38 million free cash flow positive for the year despite investing $169 million in capital projects as well as acquiring a 25% stake in Zinnwald in 2023. This underscores our low-cost position in both lithium and vanadium. We ended the year in a $323 million net debt position, and continued to maintain a strong balance sheet and adequate sources of liquidity. As of December 31, 2023, the Company had $345 million in unrestricted cash and cash equivalents and $195 million available on its revolving credit facility. As such, AMG had $540 million of total liquidity as of December 31, 2023. AMG continues to benefit from its low-cost fixed-rate debt facilities, and has an average interest rate charge across its two main debt instruments of 5%.

AMG Engineering signed $350 million in new orders during 2023, the highest full year order intake in AMG’s history, and 24% higher than in 2022. This record order intake was driven by strong orders of remelting and heat treatment furnaces, representing a 1.27x book to bill ratio. AMG’s order backlog was $295 million as of December 31, 2023.

Through its critical materials science-based solutions, AMG, as its mission, seeks to contribute to CO₂ reduction by way of “enabling” its customers to increase the efficiency of renewable energy production, and to “enable” energy saving strategies. We measure the enabled contribution to CO₂ reduction at our customer level via stringent third-party developed life cycle assessments. We based this mission on the belief that in this obviously high growth environment, we could achieve both above average financial returns and use our proprietary technologies to be at the forefront of the industrial contribution to atmospheric CO₂ reduction. Our Enabling CO₂ Reduction Portfolio (ECO₂RP) in 2023 enabled 110.3 million tons of CO₂ reduction, 11% more than the 99.4 million tons of enabled CO₂ reduction in 2022.”

Lithium

• In Brazil, our lithium concentrate plant will temporarily stop production for the change-over period in March 2024 in order to facilitate the expansion from 90,000 tons to 130,000 tons. We expect to produce 93,000 tons for the full year of 2024 and will operate at the full expanded capacity rate, or 130,000 tons per year, in the fourth quarter of 2024.
• AMG’s lithium hydroxide refinery’s first 20,000-ton module in Bitterfeld, Germany, is in advanced phases of commissioning, and the product qualification process is planned to start in the third quarter of 2024.

Vanadium

• The Zanesville, Ohio facility exceeded our target production volumes in the fourth quarter of 2023. The production from both the roasting operation and the melt shop exceeded historical averages achieved by the Cambridge, Ohio operation.
• Enacted by the Inflation Reduction Act of 2022, AMG Vanadium qualified for Section 45X effective from 2023 onwards, which provides a production credit for domestic manufacturing of critical materials. Based on preliminary regulations as issued by the IRS, AMG expects to receive a subsidy of approximately $6 million for full year 2023. The ruling is still in the comment period and, as such, is subject to a final determination.
• AMG’s innovative lithium vanadium battery (“LIVA”) projects are integral for industrial power management applications and accelerate the energy transition. The batteries are currently under various stages of bidding and development. One is operational, three are currently under contract and being engineered, and 15 are in bidding and development stages, with a total megawatt hour (MWh) capacity of 749 MWh.
• AMG LIVA has agreed to acquire the Vanadium Redox Flow Battery (“VRFB”) activities from J.M. VOITH SE & CO. KG (“VOITH”). VOITH has developed an advanced technology for controlling and balancing large-scale high-voltage VRFB energy storage systems. The technology complements LIVA’s VRFB system development. LIVA will continue to develop the technology and integrate it into its large-scale energy storage systems.
• The vanadium electrolyte plant at AMG Titanium in Nuremberg, Germany is under construction. The target capacity is 6,000 m³ vanadium electrolyte, the equivalent of approximately 100 MWh, which will serve the electricity storage market, including a vertical integration into LIVA batteries. We expect to have nameplate capacity available by the second half of 2024.
• AMG Vanadium has acquired the processing technologies and IP related activities from Transformation Technologies Inc. (“TTI”), a US company based in Oregon. This unique thermal treatment of spent catalyst and other oil refinery wastes into valuable products is complementary to AMG’s existing spent catalyst processing technology and know-how. AMG will integrate the TTI technology into its global strategic growth initiatives conducted through Shell & AMG Recycling (“SARBV”).
• SARBV’s “Supercenter” project in the Middle East is a facility to produce high-purity vanadium oxides for applications such as chemicals and aerospace as well as vanadium electrolyte for the long duration energy storage market in the Kingdom of Saudi Arabia. The facility will operate under a long-term supply contract with Saudi Aramco for vanadium-containing gasification ash from its power plants in the Kingdom. For illustration purposes, Phase 1 of the Supercenter plans to produce 8 million pounds of vanadium oxide from 7,000 metric tons of gasification ash located at a site in Jubail, Kingdom of Saudi Arabia. The FEL3 basic engineering has been submitted. The full Supercenter project will also include the processing of spent catalysts, a Fresh Catalyst R&D facility and a LIVA Hybrid Energy Storage System.

Financial Highlights

• AMG’s full year 2023 adjusted EBITDA was a record-setting $350 million due largely to high profitability in our lithium and vanadium businesses, offset by lower profit in AMG Critical Minerals.
• Cash from operating activities was $223 million in 2023, compared to $168 million in 2022, largely driven by the lithium and vanadium expansion projects as well as strong cash flows from our Silicon business driven by energy sales.
• AMG’s free cash flow⁽¹⁾ was $38 million in 2023.
• AMG’s liquidity as of December 31, 2023 was $540 million, with $345 million of unrestricted cash and $195 million of revolving credit availability.
• Annualized return on capital employed was 26.3% for 2023, compared to 30.8% in 2022.
• AMG Engineering signed $350 million in new orders during 2023, the highest in AMG’s history and 24% higher than in 2022.
• The total 2023 dividend proposed is €0.60 per ordinary share, including the interim dividend of €0.40, paid on August 9, 2023.

_{Note:
(1) Free cash flow is defined as cash flows from operating activities less cash flows used in investing activities.}

Key Figures

_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)   Adjusted EBITDA is defined as EBIT adjusted for depreciation and amortization.}

Operational Review

AMG Clean Energy Materials

AMG Clean Energy Materials’ revenue decreased 10% compared to the fourth quarter of 2022, to $158 million, driven mainly by the 76% and 26% decrease in prices for lithium carbonate and ferrovanadium, respectively, since the fourth quarter of 2022. This price decrease was partially offset by increased volumes in vanadium and lithium. Higher average annual prices for spodumene as well as higher sales volumes of vanadium, lithium concentrate, and tantalum propelled revenue for the segment 9% higher on a full year basis. In 2023, ferrovanadium and tantalum concentrate sales increased 45% and 56%, respectively, versus the prior year.

Gross profit for the quarter decreased 57% compared to the same period in the prior year, primarily due to the lower sales prices. The primary driver was the lithium price decline, which fell 76% since the fourth quarter of 2022. Full year gross profit increased 2% compared to 2022, due to the higher prices and volumes noted above.

SG&A expenses of $67 million in 2023 were 47% higher than in 2022, mainly driven by the increase in headcount related to the lithium and vanadium expansion projects, as well as higher employee benefit costs, professional fees and research and development costs.

The fourth quarter 2023 adjusted EBITDA decreased 30%, to $56 million, from $80 million in the fourth quarter of 2022, due to the decline in metal prices as noted above. Full year 2023 adjusted EBITDA, however, was 15% higher than in 2022, driven by higher prices and higher volumes as well as the incremental dividend noted below.

Enacted by the Inflation Reduction Act of 2022, AMG Vanadium qualifies for Section 45X which provides a production credit for domestic manufacturing of critical materials from 2023 onwards. Based on preliminary regulations as issued by the IRS, AMG expects to receive a subsidy of approximately $6 million for full year 2023. This subsidy is included in gross profit. The ruling is still in the comment period and, as such, is subject to a final determination.

AMG received a $10 million dividend from an equity investment which is included in adjusted EBITDA.

During the fourth quarter of 2023, a total of 29,706 dry metric tons (“dmt”) of lithium concentrates were sold, 39% higher than the 21,329 dmt in the fourth quarter of 2022 due to shipping variances in 2023. The average realized sales price was $1,943/dmt CIF China for the quarter. The average cost per ton for the quarter was $498/dmt CIF China.

During 2023, a total of 95,097 dry metric tons (“dmt”) of lithium concentrates were sold, an increase of 8,384 dmt versus 2022. The average realized sales price for 2023 was $3,160/dmt CIF China, an increase of $355/dmt over 2022. The average cost per ton for 2023 was $475/dmt CIF China.

It is important to note that fourth quarter pricing benefited from the timing lag experienced related to the contractual pricing agreements with our lithium concentrate customers. The prices of lithium concentrate and lithium carbonate have declined 56% and 41%, respectively, since the end of the third quarter 2023.

In 2024, we anticipate the cost per ton to rise due to unabsorbed costs during the ramp-up as well as lower relative tantalum sales volumes offsetting higher spodumene production. AMG is one of the lowest cost lithium concentrate mines in the world and we plan to maintain that position.

AMG Critical Minerals

AMG Critical Minerals’ revenue for the fourth quarter of 2023 decreased by 21%, to $55 million, mainly due to lower volumes largely driven by the silicon metal plant operating one furnace during the quarter, as discussed in detail below. The slowdown in the European industrial economy also continued to negatively impact the segment.

Gross profit in the fourth quarter of 2023 was $19 million lower compared to the same period in 2022, largely due to lower volumes in silicon and antimony in the current quarter.

SG&A expenses in 2023 of $29 million were 4% higher than in 2022 related to an increase in professional fees during the fourth quarter.

The fourth quarter 2023 adjusted EBITDA decreased 88% compared to the same period in 2022, to $2 million, largely driven by the silicon metal plant as well as the slowdown in the end-use markets for the segment in the current quarter. As a result, full year 2023 adjusted EBITDA decreased to $7 million from $38 million in the prior year.

AMG Silicon operated one of four furnaces in the fourth quarter of 2023. We plan to run two of four furnaces for the remainder of 2024. The operational parameters of the silicon business will continue to be reviewed on an ongoing basis. Due to the noted interruptions in AMG Silicon’s operations, the financial impact of the business will be excluded from adjusted EBITDA during this period of abnormal operations. However, AMG Silicon generated $26 million in cash flow from operating activities during the quarter driven by the receipt of energy sales made in the fourth quarter of 2022.

AMG Critical Materials Technologies

AMG Critical Materials Technologies’ fourth quarter 2023 revenue increased by $10 million, or 7%, compared to the same period in 2022. This improvement was driven by strong revenues in our engineering unit, as well as higher sales volumes of chrome metal and higher sales prices of titanium alloys, partially offset by lower chrome metal pricing. Revenue for the segment in 2023 increased 10% compared to prior year.

SG&A expenses increased by 10% in 2023 compared to 2022, due to additional personnel at AMG Engineering and AMG LIVA corresponding to the increased order backlog and business development, respectively.

AMG Critical Materials Technologies’ adjusted EBITDA was $14 million during the fourth quarter, 40% higher than in the same period of 2022. The increase was primarily due to higher profitability in Engineering and Titanium, partially offset by lower chrome margins driven by continued sequential decline in chrome price in the fourth quarter of 2023.

AMG Engineering signed $27 million in new orders during the fourth quarter of 2023. On a full year basis, AMG signed a record high of $350 million in new orders during 2023, 24% higher than in 2022, representing a 1.27x book to bill ratio. The 2023 order intake was driven by strong orders of remelting and heat treatment furnaces. Order backlog was $295 million as of December 31, 2023.

Financial Review

Tax

AMG recorded an income tax expense of $95 million in 2023, compared to $84 million in 2022. This variance was due to negative movements in the Brazilian real in 2023 as compared to 2022 as well as non-cash deferred tax expenses related to the derecognition of certain tax assets. These tax assets were associated with interest expense carryforwards in our US business as well as loss carryforwards in our German business. These deferred tax expenses were partially offset by the lower profitability in the current quarter relative to the same period in the prior year.

AMG paid taxes of $103 million in 2023, compared to tax payments of $42 million in 2022. The higher cash payments in 2023 were largely a result of the timing lag related to Brazil’s strong performance in late 2022 through the second quarter of 2023.

Exceptional Items

AMG’s fourth quarter and full year 2023 gross profit includes exceptional items, which are not included in the calculation of adjusted EBITDA.

A summary of exceptional items included in gross profit in 2023 and 2022 are below:

Exceptional items included in gross profit

AMG had $15 million non-cash expense during the fourth quarter of 2023 mainly driven by Lithium GmbH’s inventory cost adjustment of purchased lithium hydroxide which has been excluded in the calculation of adjusted EBITDA.

In mid 2023, AMG initiated a restructuring program to improve efficiencies and reduce headcount. The largest restructuring expenses are in AMG Titanium with $4 million, and in AMG Graphite with a restructuring expense of $1 million in the fourth quarter of 2023.

As a result of the restructuring program, certain non-core assets were also impacted. Asset impairments were recorded due to the retirement of these assets in the fourth quarter of 2023 at AMG Titanium and AMG Graphite of $3 million and $7 million, respectively.

SG&A

AMG’s fourth quarter 2023 SG&A expenses were $46 million compared to $37 million in the fourth quarter of 2022, with the increase largely due to higher personnel costs driven by increased hiring in our Lithium, Engineering, and LIVA businesses.

Full year 2023 SG&A expenses were $178 million, 20% higher than in 2022, due to increased professional fees associated with strategic projects during 2023 as well as higher personnel costs attributable to increased hiring in our Lithium, Engineering, and LIVA businesses.

Liquidity

AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the fourth quarter. As of December 31, 2023, the Company had $345 million in unrestricted cash and cash equivalents and $195 million available on its revolving credit facility. As such, AMG had $540 million of total liquidity as of December 31, 2023.

Net Finance Costs

AMG’s fourth quarter 2023 net finance income was $2 million compared to $4 million of income in the fourth quarter of 2022. This decrease was mainly driven by lower capitalization of interest expense now that the Zanesville plant is fully operational.

Final Dividend Proposal

AMG intends to declare a dividend of €0.60 per ordinary share over the financial year 2023. The interim dividend of €0.40, paid on August 9, 2023, will be deducted from the amount to be distributed to shareholders. The proposed final dividend per ordinary share therefore amounts to €0.20.

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 8, 2024.

Outlook

Our ongoing cost reduction and efficiency programs will reduce our headcount by approximately 200 which will essentially be offset by the ramp-up of our expansions in Germany and Brazil, as well as the growth in our LIVA and Engineering businesses.

Capital expenditures for 2024 are expected to be approximately $125 million, mainly driven by the lithium concentrate expansion in Brazil and expenditures related to the construction of the lithium hydroxide plant in Germany.

AMG has no expected financing needs in 2024. 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 $540 million can fully fund all of the approved capital expansion projects and all other financial obligations.

AMG’s two main lithium expansion projects are heading towards completion: our lithium concentrate expansion project from 90,000 tons to 130,000 tons in Brazil and module 1 of our lithium hydroxide refinery in Germany. We are reviewing our resource development projects and all other expansion activities in light of the present market conditions.

Regarding 2024 outlook, from the lithium concentrate and lithium carbonate market price highs in November 2022 of $6,110 per ton and $84,062 per ton, respectively, prices have each declined by 84%.

On November 8, 2023, we indicated an adjusted EBITDA for 2024 of approximately $200 million excluding any profitability from our Bitterfeld lithium hydroxide refinery and utilizing contemporary pricing. Since then, market prices for spodumene and lithium carbonate have declined 50% and 39%, respectively. Utilizing today’s price levels, lithium profitability will be $60 million lower and vanadium profitability will be $10 million lower, therefore AMG’s 2024 adjusted EBITDA will be approximately $130 million.

Our analysis of the long-term supply and demand trends in lithium gives us confidence that the present low prices are unsustainable.

Segmental Realignment

The Company has changed its organizational structure effective January 1, 2024, and will therefore report financials for the new segments starting in the first quarter of 2024. This change results in three reporting segments: AMG Lithium, AMG Vanadium, and AMG Technologies. Each of these segments have very specific trends and business models, and require very different management skill sets.

AMG’s 2023 pro forma segmental information for AMG Lithium, AMG Vanadium, and AMG Technologies is shown below:

AMG Lithium

AMG Vanadium

AMG Technologies

Profit for the period to adjusted EBITDA reconciliation

_{Notes:
(1)   The Company is in the initial development and ramp-up phases for several strategic expansion projects, including the joint venture with Shell, the LIVA 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.}

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’s Lithium segment spans the lithium value chain, reducing the CO₂ footprint of both suppliers and customers. AMG’s Vanadium segment is the world’s market leader in recycling vanadium from oil refining residues, spanning the Company’s vanadium, titanium, and chrome businesses. AMG’s Technologies segment is the established world market leader in advanced metallurgy and provides equipment engineering to the aerospace engine sector globally. It serves as the engineering home for the Company’s fast-growing LIVA batteries, and spans AMG’s mineral processing operations in graphite, antimony, 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 Critical Materials 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.

Attachment

• Fourth Quarter & FY 2023 Earnings Press Release

AMG Reports Third Quarter 2023 Results and Announces New Corporate Structure Effective January 1, 2024

Nov 8, 2023

Amsterdam, 8 November 2023 (Regulated Information) — AMG Critical Materials N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported third quarter 2023 revenue of $369 million, a 13% decrease versus the third quarter of 2022. Third quarter 2023 EBITDA of $54 million decreased 48% compared to the third quarter of 2022.

Cash from operating activities was $178 million on a year-to-date basis, compared to $111 million for the first nine months of 2022.

_{Note:
(1)   EBITDA is defined as EBIT adjusted for depreciation and amortization.}

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “The 48% decrease in EBITDA compared to the third quarter of 2022 was driven in large part by the global decline in metal prices within our portfolio, predominantly the lithium price decline. The average quarterly prices of lithium carbonate and ferrovanadium have decreased over 50% and 29%, respectively, versus the average pricing in the third quarter of 2022. On a year-to-date basis, however, EBITDA has increased 17% compared to the first nine months of 2022.

We ended the third quarter in a $320 million net debt position, and continued to maintain a strong balance sheet and adequate sources of liquidity during the quarter. As of September 30, 2023, the Company had $347 million in unrestricted cash and cash equivalents and $195 million available on its revolving credit facility. As such, AMG had $542 million of total liquidity as of September 30, 2023. In today’s rising rate environment, AMG continues to benefit from its low-cost fixed-rate debt facilities, and has an average interest rate charge across its two main debt instruments of 5%.

AMG Engineering signed $81 million in new orders during the third quarter of 2023, 51% higher year-to-date in 2023 than in the same period in 2022, driven by strong orders of remelting and heat treatment furnaces, representing a 1.02x book to bill ratio. AMG’s order backlog was $341 million as of September 30, 2023, the highest in AMG’s history for the second straight quarter. This is largely driven by the aerospace market, which is experiencing strong growth. Our third quarter 2023 order intake remains at a very high level, reaching $323 million year-to-date.”

Strategic Highlights

The Supervisory Board has authorized the implementation of a new corporate structure, which will be operational January 1, 2024. The present segmental reporting structure will be replaced by three corporate entities: AMG Lithium BV, AMG Vanadium BV, and AMG Technologies (AG/GmbH). Each entity will have its own leadership team and operating management.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “The three new 100% owned subsidiaries AMG Lithium, AMG Vanadium, and AMG Technologies, have very specific trends and business models, and require very different management skill sets. They will each be managed by newly installed Management Boards, which will exercise their control through respective Supervisory Boards that will reflect corporate governance principles that currently apply to AMG Critical Materials NV.

This updated structure will enable AMG to realize strategic, operational, and risk management synergies that will improve decision making, as well as strengthen the resiliency of the organization. This new structure will decrease the potential for overreliance on individual executives, improve succession planning, and improve collaboration throughout the organization. Additionally, the new structure will create strategic flexibility for various forms of equity diversification.”

Lithium

• In Brazil, the lithium concentrate plant shutdown to facilitate the expansion from 90,000 tons to 130,000 tons will take place in the first quarter of 2024 due to delivery delays of electronic components for processing automation. This will negatively impact second quarter sales volumes. We expect to produce at full run rate capacity, which is 130,000 tons per year, starting in the third quarter of 2024.
• AMG Brazil’s project with Grupo Lagoa will begin basic engineering in December 2023. From present data, we conclude that the plant will confirm the main assumptions for the construction of a 150,000-ton lithium concentrate plant at the site.
• AMG’s lithium hydroxide refinery’s first 20,000-ton module in Bitterfeld, Germany, is in the initial phases of commissioning and the ramp-up and the qualification process is planned for the second and third quarters of 2024. We expect to produce approximately 7,000 tons of qualified battery-grade lithium hydroxide in 2024 which is not included in our EBITDA guidance for 2024. We expect to produce and sell a full 20,000 tons in 2025.

Vanadium

• The spent catalyst roasting facility in Zanesville, Ohio operated at full capacity for the third quarter and outperformed our roasting facility in Cambridge, Ohio. The Zanesville melt shop has operated at full capacity utilization and the Vanadium team is focused on increasing operational availability, optimizing cycle time and increasing yield.
• AMG’s innovative lithium vanadium battery (“LIVA”) projects are integral for industrial power management applications and accelerate the industrial energy transition. The batteries are currently under various stages of bidding and development. One is operational, three are under construction, and 13 are in bidding and development stages, with a total megawatt hour (MWh) capacity of 379 MWh.
• The vanadium electrolyte plant at AMG Titanium in Nuremberg, Germany is under construction. The target capacity is 6,000 m³ vanadium electrolyte, the equivalent of approximately 100 MWh, which will serve the electricity storage market, including a vertical integration into LIVA batteries. Production is expected to start in the first quarter of 2024.
• Applying a newly developed process technology, AMG Titanium in Nuremberg, Germany has started to process spent roasted catalyst to V₂O₅.
• Shell & AMG Recycling’s (“SARBV”) project development of a closed loop circular recycling facility in the Middle East is progressing. Phase I of the “Supercenter” project, a hydrometallurgical facility to process vanadium-containing gasification ash, is under a long-term contract with Aramco. The gasification ash will be processed into vanadium oxide and then to vanadium electrolytes for use in batteries in the Kingdom of Saudi Arabia. Phase I is expected to reach FEL3 status by the end of the year. The “Supercenter” concept also includes spent catalyst recycling projects, fresh catalyst production, and the manufacturing of vanadium batteries. The Phase I facility will also produce 6,000 m³ of electrolyte, which will support 100 MWh of vanadium redox flow battery capacity annually. In addition, a LIVA Hybrid Energy Storage System and a Fresh Catalyst R&D facility will be part of Phase 1.

Financial Highlights

• Cash from operating activities was $25 million in the third quarter of 2023, and $178 million on a year-to-date basis, compared to $111 million for the first nine months of 2022.
• AMG’s liquidity as of September 30, 2023 was $542 million, with $347 million of unrestricted cash and $195 million of revolving credit availability.
• Annualized return on capital employed was 28.4% for the first nine months of 2023, compared to 29.5% for the same period in 2022.
• AMG Engineering’s order backlog of $341 million as of September 30, 2023, the highest in AMG’s history, was driven primarily by the aerospace industry.

Key Figures

_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

AMG Clean Energy Materials’ revenue decreased 25% compared to the third quarter of 2022, to $140 million, driven mainly by decreased prices in both lithium and vanadium as well as lower volumes in lithium concentrate, partially offset by increased volumes in vanadium. Ferrovanadium production increased 48% versus the third quarter of 2022.

Gross profit for the quarter decreased 60% compared to the same period in the prior year, primarily due to the lower sales prices. The primary driver is the lithium price decline. Also, vanadium gross profit was lower due to fixed price inventory being processed from global sources. All other existing contracts are under indexed prices. We are working towards long-term contracts similar to our Cambridge model.

SG&A expenses in the third quarter of 2023 were higher than the same period in 2022 at $15 million, mainly driven by the increase in headcount related to the lithium and vanadium expansion projects, as well as higher employee benefit costs.

The third quarter 2023 EBITDA decreased 53%, to $39 million, from $84 million in the third quarter of 2022, due to the decline in metal prices as noted above.

During the third quarter of 2023, a total of 16,012 dry metric tons (“dmt”) of lithium concentrates was sold. The third quarter experienced lower sales volumes due to shipping schedule variances noted in the second quarter. The average realized sales price was $2,395/dmt CIF China for the quarter. The average cost per ton for the quarter was $529/dmt CIF China. The cost per ton is lower than the second quarter due to higher sales volumes of tantalum concentrate in the current quarter.

In 2024, we anticipate the cost per ton to rise due to unabsorbed costs during the ramp-up as well as lower relative tantalum sales volumes offsetting higher spodumene production. It is important to note that AMG is one of the lowest cost mines in the world and we plan to maintain that position.

AMG Critical Minerals

AMG Critical Minerals’ revenue for the third quarter of 2023 decreased by 38%, to $53 million, mainly due to lower volumes across the segment largely driven by the silicon metal plant operating one furnace during the quarter, as discussed in detail below. The slowdown in the European industrial economy also continued to negatively impact the segment.

Gross profit of $7 million in the third quarter of 2023 was $6 million higher compared to the same period last year, largely due to the significant increases in gas and electricity costs experienced in the third quarter of 2022.

SG&A expenses in the third quarter of 2023 of $7 million were in line with the same period in 2022.

The third quarter 2023 EBITDA decreased 83% compared to the same period in 2022, to $1 million, due to silicon shutdown as well as the slowdown in the end-use markets for the segment in the current quarter.

AMG Silicon operated one of four furnaces throughout the third quarter and plans to operate one furnace for the remainder of 2023. The operational parameters of the silicon business will continue to be reviewed on an ongoing basis. Due to the noted interruptions in AMG Silicon’s operations, the financial impact of the business will be excluded from EBITDA during this period of abnormal operations. However, AMG Silicon generated $10 million in cash flow from operating activities during the quarter driven by the receipt of energy sales made in the fourth quarter of 2022.

AMG Critical Materials Technologies

AMG Critical Materials Technologies’ third quarter 2023 revenue increased by $24 million, or 16%, compared to the same period in 2022. This improvement was driven by strong revenues in our engineering unit, as well as higher sales volumes of titanium alloys and chrome metal, partially offset by lower chrome metal pricing.

SG&A expenses increased by 10% in the third quarter of 2023 compared to the same period in 2022, due to additional personnel at AMG Engineering and AMG LIVA corresponding to the record order backlog and business development, respectively.

AMG Critical Materials Technologies’ EBITDA was $13 million during the quarter compared to $12 million in the same period of 2022. The increase was primarily due to higher profitability in Engineering and Titanium, partially offset by lower chrome margins driven by continued sequential decline in chrome price in the third quarter of 2023.

AMG Engineering signed $81 million in new orders during the third quarter of 2023, driven by strong orders of remelting and heat treatment furnaces, representing a 1.02x book to bill ratio. Order backlog was $341 million as of September 30, 2023, the highest in AMG’s history.

AMG Engineering has been selected by PCC’s TIMET to supply the vacuum melting and re-melting furnaces for their new, state-of-the-art Titanium melt facility in Ravenswood, West Virginia. AMG’s scope includes several vacuum arc re-melting, electron beam welding, and electron beam melting furnaces, signifying one of the largest orders in all of AMG Engineering’s history.

Financial Review

Tax

AMG recorded an income tax expense of $13 million in the third quarter of 2023, compared to $39 million in the same period in 2022. This variance was mainly driven by lower profitability in the current quarter.

AMG paid taxes of $33 million in the third quarter of 2023, compared to tax payments of $10 million in the third quarter of 2022, primarily due to the timing lag in tax payments relative to tax expense recognition.

Exceptional Items

AMG’s third 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 third quarters of 2023 and 2022 are below:

Exceptional items included in gross profit

AMG Vanadium had a $1.3 million non-cash expense during the third quarter of 2023. This is a result of inventory cost adjustments associated with declining prices and an increased inventory position of spent catalyst as we diversify our sourcing strategy which has been adjusted in EBITDA.

SG&A

AMG’s third quarter 2023 SG&A expenses were $43 million compared to $37 million in the third quarter of 2022, with the increase largely attributable to higher personnel costs driven by increased hiring in our Lithium, Engineering, and LIVA businesses.

Liquidity

AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the third quarter. As of September 30, 2023, the Company had $347 million in unrestricted cash and cash equivalents and $195 million available on its revolving credit facility. As such, AMG had $542 million of total liquidity as of September 30, 2023.

Net Finance Costs

AMG’s third quarter 2023 net finance cost was $9 million compared to $14 million in the third quarter of 2022. This decrease was mainly driven by foreign exchange gains of $3 million during the quarter primarily due to non-cash intergroup balances and higher interest income earned on an increased cash and cash equivalents balance in the third quarter 2023 compared to the third quarter of 2022. Additionally, in today’s rising rate environment, AMG continues to benefit from its low-cost fixed-rate debt facilities. AMG has an average interest rate charge across its two main debt instruments of 5%.

Outlook

Since the end of July when we issued the previous 2023 EBITDA guidance of between $350 million and $380 million, market prices for spodumene and lithium carbonate have decreased by 50% and 43%, respectively. Given these price decreases, AMG’s new EBITDA guidance for the full year 2023 is approximately $320 million.

Considering the ramp-up of the strategic projects explained above, as well as the volatility of our key material prices, specifically lithium, it is challenging to provide firm guidance for 2024. The recent fall in lithium prices has surprised every industry participant. Establishing the cause of the fall in prices and projecting future movements involves analyzing both the Chinese lithium industry as well as broader macroeconomic factors in China.

Given the difficulty of this analysis, and despite certain signs that the lithium supply and demand picture remains strong, there is high uncertainty with regard to near-term pricing dynamics. Therefore, utilizing today’s depressed price levels, AMG’s EBITDA will be approximately $200 million in 2024 with a stronger performance in the second half of the year.

Profit for the period to adjusted EBITDA reconciliation

_{Notes:
(1)   The Company is in the initial development and ramp-up phases for several strategic expansion projects, including the joint venture with Shell, the LIVA 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.}

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 Critical Materials 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.

Attachment

• Third Quarter 2023 Earnings Press Release

AMG Critical Materials N.V. Announces Interim Dividend

Jul 26, 2023

Amsterdam, 26 July 2023 (Regulated Information) — AMG Critical Materials N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) declares an interim dividend of €0.40 per ordinary share, from an interim dividend of €0.30 per ordinary share in the prior year.

The interim dividend of €0.40 per ordinary share, in respect of the period from January 1, 2023 to June 30, 2023, is payable on August 9, 2023 to shareholders of record as of August 1, 2023. The ex-dividend date will be July 31, 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 Critical Materials 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.

Attachment

• Interim Dividend 2023

AMG’s Lithium Operations Continue to Drive Record Earnings with the Fourth Straight Quarter Exceeding $100 Million of EBITDA

Jul 26, 2023

Amsterdam, 26 July 2023 (Regulated Information) — AMG Critical Materials N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported second quarter 2023 revenue of $439 million, a 4% increase versus the second quarter of 2022. Second quarter 2023 EBITDA of $107 million was 32% higher than the second quarter of 2022.

_{Note:
(1)   EBITDA is defined as EBIT adjusted for depreciation and amortization.}

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “This is the fourth straight quarter in which AMG has exceeded $100 million of EBITDA. The $26 million, or 32%, EBITDA increase over the second quarter of 2022 was driven largely by our Clean Energy Materials segment, specifically AMG Lithium’s Brazilian operation with an EBITDA contribution of $89 million.

AMG’s liquidity as of June 30, 2023 was $586 million, with $391 million of unrestricted cash and $195 million of revolving credit availability. The Company will pay an interim 2023 dividend of €0.40 per ordinary share on or around August 9, 2023, to shareholders of record on August 1, 2023.

AMG Engineering signed $167 million in new orders during the second quarter of 2023, driven by strong orders of remelting and induction furnaces, representing a 2.48x book to bill ratio. AMG’s order backlog of $337 million as of June 30, 2023, which is the highest in AMG’s history. This is largely driven by the US aerospace market. Our second quarter 2023 US order intake has essentially doubled from our second quarter 2022 US order intake.

We continue to drive our lithium strategy forward and are pleased to announce that we have signed a mandate letter with KfW IPEX-Bank GmbH and with Citi to structure and arrange the financing for the construction of our proposed technical-grade lithium chemical plant in Brazil. The financing structure is expected to cover all the funding requirements and be supported by Euler Hermes (the German Export Credit Agency representing its government) under its Untied Loan Guarantee program for projects which deliver critical raw materials into Germany. This proposed financing is a cornerstone of our lithium strategy to be the premier supplier of battery-grade lithium hydroxide in Europe, and another important step towards an independent and sustainable lithium supply chain for Europe. In addition, this project conforms with AMG Brazil’s commitment to upgrade its operations to produce a higher value product, while significantly contributing to reducing CO₂ emissions by lowering total volumes shipped.”

Strategic Highlights

Lithium

• The lithium concentrate production expansion project in AMG Brazil is progressing as planned.
• AMG signed a mandate letter with KfW IPEX-Bank GmbH and Citi to structure and arrange the financing for the construction of our proposed technical-grade lithium chemical plant in Brazil. The financing structure is expected to cover all the funding requirements and be supported by Euler Hermes (the German Export Credit Agency representing its government) under its Untied Loan Guarantee program for projects which deliver critical raw materials into Germany. This proposed financing is a cornerstone of our strategy to be the premier supplier of battery-grade lithium hydroxide in Europe.
• AMG Lithium’s hydroxide refinery in Bitterfeld, Germany, Europe’s first, is expected to start commissioning for the first 20,000-ton module expected in the fourth quarter of 2023.
• AMG Lithium signed a non-binding memorandum of understanding (“MOU”) in May 2023 with Fortum Battery Recycling Oy (“Fortum”), a Nordic clean energy provider. Fortum’s new commercial scale hydrometallurgical plant is able to efficiently recover valuable metals from old electric vehicle lithium-ion batteries. The lithium product recovered by Fortum will be delivered to AMG Lithium for further processing.

Vanadium

• The new vanadium spent catalyst recycling facility in Zanesville, Ohio, is currently running at full capacity and targeting full run rate production for the second half of 2023.
• AMG’s innovative lithium vanadium battery (“LIVA”) projects for industrial power management applications outlined at our Capital Markets Day are under various stages of construction.
• 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”) project development in the Middle East are progressing. The Supercenter project in the Kingdom of Saudi Arabia is completing the FEL3 feasibility study later this year.

Financial Highlights

• Revenue increased by 4% to $439 million in the second quarter of 2023 from $424 million in the second quarter of 2022.
• EBITDA was $107 million in the second quarter of 2023, up 32% versus the second quarter 2022 EBITDA of $81 million.
• Annualized return on capital employed was 35.7% for the first six months of 2023, compared to 25.5% for the same period in 2022.
• Cash from operations was $60 million for the second quarter of 2023, compared to $40 million in the second quarter of 2022, driven by the high profitability of AMG Lithium in Brazil.
• Net income attributable to shareholders for the second quarter of 2023 was $43 million, yielding $1.28 diluted earnings per share compared to $0.91 in the same period in 2022.
• AMG’s liquidity as of June 30, 2023 was $586 million, with $391 million of unrestricted cash and $195 million of revolving credit availability.
• AMG declares an interim dividend of €0.40 per ordinary share, to be paid in the third quarter of 2023.

Key Figures

_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

AMG Clean Energy Materials’ revenue increased 30% compared to the second quarter of 2022, to $208 million, driven mainly by increased sales volumes and increased prices in lithium concentrates.

Gross profit for the quarter increased 58% compared to the same period in the prior year, primarily due to the higher sales volumes across the segment as well as higher lithium pricing.

SG&A expenses in the second quarter of 2023 were higher than the same period in 2022 at $21 million, mainly driven by the increase in headcount related to the lithium and vanadium expansion projects, as well as higher employee benefit costs.

The second quarter 2023 EBITDA increased 65%, to $96 million, from $58 million in the second quarter of 2022, due to the improved gross profit as noted above.

AMG Vanadium’s production was negatively impacted by a defective fan provided by a supplier at our new Zanesville facility. AMG has commenced an arbitration claim seeking compensatory damages, which include costs incurred and lost profitability.

During the second quarter of 2023, a total of 28,870 dry metric tons (“dmt”) of lithium concentrates was sold. The second quarter experienced increased sales volumes due to shipping schedule variances which will negatively impact the third quarter. The average realized sales price was $3,633/dmt CIF China for the quarter. The average cost per ton for the quarter was $547/dmt CIF China. The cost per ton is higher than the first quarter due to lower volumes and pricing in tantalum concentrate in the quarter. The additional lithium concentrate shipments and slightly higher costs in tantalum concentrate resulted in quarterly EBITDA for AMG Brazil of $89 million.

AMG Critical Minerals

AMG Critical Minerals’ revenue for the second quarter of 2023 decreased by 45%, to $57 million, mainly due to lower volumes across the segment largely driven by the silicon metal plant operating one furnace during the quarter, as discussed in detail below. The segment also suffered from a slowdown in the European industrial economy.

Gross profit of $8 million in the second quarter was 44% lower compared to the second quarter of 2022, largely due to the lower volumes in the current quarter.

SG&A expenses in the second quarter of 2023 increased by 8%, to $8 million, compared to the same period in 2022. This was largely driven by higher professional fees in the current quarter.

The second quarter 2023 EBITDA decreased 83% compared to the same period in 2022, to $2 million, due to the lower gross profit as noted above.

AMG Silicon operated one of four furnaces throughout the second quarter and plans to operate one furnace for the remainder of 2023. The operational parameters of the silicon business will continue to be reviewed on an ongoing basis. 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 $9 million in cash flow from operating activities during the quarter driven by the receipt of energy sales made in the fourth quarter of 2022.

AMG Critical Materials Technologies

AMG Critical Materials Technologies’ second quarter 2023 revenue increased by $13 million, or 8%, compared to the same period in 2022. This improvement was driven by strong revenues in our engineering unit, as well as higher sales volumes of titanium alloys and chrome metal, partially offset by lower chrome metal pricing.

SG&A expenses increased by 8% in the second quarter of 2023 compared to the same period in 2022, due to additional personnel at AMG Engineering and AMG LIVA corresponding to the record order backlog and business development, respectively.

AMG Critical Materials Technologies’ EBITDA was $10 million during the quarter compared to $14 million in the same period of 2022. The decrease was primarily due to lower chrome prices in the second quarter of 2023 partially offset by higher profitability in Engineering and Titanium.

AMG Engineering signed $167 million in new orders during the second quarter of 2023, driven by strong orders of remelting and induction furnaces, representing a 2.48x book to bill ratio. Order backlog was $337 million as of June 30, 2023, the highest in AMG’s history.

Financial Review

Tax

AMG recorded an income tax expense of $27 million in the second quarter of 2023, compared to $23 million in the same period in 2022. This variance was mainly driven by higher profitability in AMG Lithium at its Brazil operation, offset by US tax expense and movements in the Brazilian real. The effects of the Brazilian real caused a $2 million tax benefit in the second quarter of 2023, compared to a $4 million tax expense 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 $35 million in the second quarter of 2023, compared to tax payments of $9 million in the second quarter of 2022. The higher cash taxes in the current quarter were a result of tax payments tracking the consistent upward trend in Brazil results.

Exceptional Items

AMG’s second 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 second quarters of 2023 and 2022 are below:

Exceptional items included in gross profit

AMG Vanadium had a $3.7 million non-cash expense during the second quarter of 2023. This is a result of inventory cost adjustments associated with declining prices and inventory specification issues due to the acquisition and testing of global refinery waste which has been adjusted in EBITDA.

SG&A

AMG’s second quarter 2023 SG&A expenses were $49 million compared to $37 million in the second quarter of 2022, with the increase largely attributable to higher personnel costs driven by increased hiring in our Lithium, Engineering, and LIVA businesses. It was also driven by a one-time pension expense of $6.7 million due to the restructuring of executive employee benefit plans.

Liquidity

AMG ended the second quarter in a $280 million net debt position. This decrease versus year-end 2022 was mainly due to higher cash balances from strong operating cash flow.

AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the second quarter. As of June 30, 2023, the Company had $391 million in unrestricted cash and cash equivalents and $195 million available on its revolving credit facility. As such, AMG had $586 million of total liquidity as of June 30, 2023.

Net Finance Costs

AMG’s second quarter 2023 net finance cost was $7 million compared to $12 million in the second quarter of 2022. This variance was mainly driven by higher interest income earned, due to the overall increase in global interest rates, and an increase in cash and cash equivalents balances as well as foreign exchange losses in the prior period. Additionally, in today’s rising rate environment, AMG continues to benefit from its low-cost fixed-rate debt facilities. AMG has an average interest rate charge across its two main debt instruments of 5%.

Outlook

Given the global economic uncertainty and the slowdown in China, current spot prices across AMG’s critical materials portfolio are significantly below the prices we experienced when we announced our initial guidance for 2023 in November 2022. The price of lithium carbonate in November 2022, the date of our $400 million EBITDA guidance, has now almost halved and our other relevant portfolio prices are down an average of 25%.

Therefore, we have changed our full year EBITDA guidance for 2023 from “exceeding $400 million in EBITDA” to “a range between $350 million to $380 million in EBITDA.” An EBITDA in this range represents the highest EBITDA in the history of AMG.

As previously disclosed, third quarter profitability will be negatively impacted by lower volumes associated with the spodumene expansion project. Volumes will recover in the fourth quarter as the project begins to ramp up.

Regarding our long-term guidance, we are extremely pleased with the advancement of our strategic projects. We are moving forward with our lithium concentrate expansion in Brazil. We’ve signed a mandate letter to fund the chemical upgrader in Brazil, and our lithium hydroxide refinery in Bitterfeld, Germany, is under construction, with commissioning for the first 20,000-ton module expected in the fourth quarter of 2023.

These transformational projects in lithium, our newly complete ferrovanadium spent catalyst recycling facility in Ohio, and the continued ramp-up in our AMG Critical Materials Technologies segment will drive increased volumes across our Clean Energy Materials segment and confirm our confidence in our long-term guidance. Our long-term guidance therefore remains unchanged at an EBITDA level of $650 million, or more, in 5 years, or earlier.

Profit for the period to adjusted EBITDA reconciliation

_{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.}

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 Critical Materials 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.

Attachment

• Second Quarter 2023 Earnings PR

AMG Announces Results of the Annual General Meeting

May 4, 2023

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.        +1 610 975 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.

Attachment

• Results of the 2023 AGM

AMG Announces Final 2022 Dividend

May 4, 2023

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.        +1 610 975 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.

Attachment

• Final Dividend May 2023

AMG’s Lithium Operations Continue to Drive Record Earnings

May 3, 2023

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.

_{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

_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

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

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

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

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

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

_{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.}

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.

Attachment

• First Quarter 2023 Earnings PR

AMG Advanced Metallurgical Group N.V. Announces Finalization of 25% Shareholding in Zinnwald Lithium Plc

Mar 23, 2023

Amsterdam, 23 March 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.        +1 610 975 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.

Attachment

• Shareholding in Zinnwald

AMG Advanced Metallurgical Group N.V. Announces 25% Shareholding in Zinnwald Lithium Plc

Mar 22, 2023

Amsterdam, 22 March 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.        +1 610 975 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.

Attachment

• Shareholding in Zinnwald Lithium Plc

AMG’s Low-Cost Lithium Operations Drive AMG to Record-Setting Full Year Earnings

Feb 22, 2023

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.

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

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

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

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

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

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

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

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.