October 27, 2021 12:00 ET | Source: AMG Advanced Metallurgical Group NV AMG Advanced Metallurgical Group NV
Amsterdam, October 27, 2021 (regulated information)-AMG Advanced Metallurgical Group NV ("AMG", EURONEXT AMSTERDAM: "AMG") reported revenue of $311.9 million in the third quarter of 2021, compared to 1.997 in the third quarter An increase of 58% in the third quarter of 2021. The EBITDA for the third quarter of 2021 was US$33.1 million, which is the fifth consecutive quarter of quarter-on-quarter growth after the low point of the pandemic in the second quarter of 2020.
Dr. Heinz Schimmelbusch, Chairman and Chief Executive Officer of the Management Committee, said: "With regard to COVID, we will continue to take all available safety measures and give the highest degree of attention to ensure that our employees work in the lowest risk environment possible.
"Despite the negative seasonal effects, AMG continued to improve EBITDA in the third quarter. All of AMG's businesses are experiencing sustained price increases and strong sales, but the operating environment has become more challenging, with increased shipping time and costs. And the increase in energy prices has affected every business unit. AMG will pass these cost increases on to customers where possible, and we will continue to actively manage these cost risks.
"All departments have performed well, most notably our clean energy materials department. At present, our main strategic projects are concentrated in this department. This department continues to provide strong EBITDA, an increase of 44% compared to the second quarter of 2021, reaching At US$18 million, this is the sixth consecutive quarter of EBITDA growth.
"AMG's clean energy materials sector strategic projects are proceeding as planned. Each of these projects aims to increase our production of electricity storage materials and/or increase our footprint in the circular economy, and each of these projects- The second spent catalyst recovery facility Spodumene 1 and battery-grade lithium hydroxide upgrader Germany-will significantly increase our profitability and help achieve our long-term goals.
"As far as our project execution capabilities are concerned, the construction of AMG Vanadium's second spent catalyst recovery facility in Zansville, Ohio continues to be completed on time. As a reminder, we also encountered the production cost and output of spodumene in Brazil. This is the goal of project decision-making. In the process of transforming into a high-growth company through such projects, execution ability is a key success factor.
"All these investments are in line with our CO2 reduction strategy. The CO2 reduction portfolio (ECO2RP) we achieve in 2021 will be significantly better than our CO2 reduction in 2020. In addition, we are preparing a comprehensive long-term direct range 1 and Scope 2 CO2 reduction targets, which will be announced at the annual general meeting of shareholders in May 2022."
(1) EBIT is defined as income before interest and income tax. EBIT does not include restructuring, asset impairment, inventory cost adjustments, environmental reserves, special legal expenses, equity-settled share-based payments and strategic expenses. Starting from January 1, 2021, AMG has changed its adjusted EBIT calculation to no longer include the impact of foreign exchange. This change was made to take into account the changes in the company's hedging policy and to better align the reported adjusted EBITDA with our bank contract calculations. Starting from January 2021, the company will no longer hedge the European cash pool inter-group balance sheet risk exposure, which will lead to greater volatility in our foreign exchange financial performance, which we believe cannot represent our operating performance. The foreign exchange loss in the third quarter of 2021 was US$2.5 million. Due to this hedging policy change, we did not retrospectively apply this change to the data of the previous year, otherwise it would result in a reduction of US$900,000 in earnings before interest and taxes in the previous period. (2) EBITDA is defined as EBIT adjusted for depreciation and amortization.
AMG's revenue from clean energy materials increased by US$48.9 million, or 87%, to US$105.3 million, mainly due to the increase in sales of lithium concentrates and the increase in the prices of vanadium, tantalum and lithium concentrates.
The gross profit before non-recurring items in the quarter increased by $16.9 million compared with the same period last year, mainly due to the increase in the price environment.
The SG&A expenses for the third quarter of 2021 are US$10.1 million, which is US$2 million higher than the third quarter of 2020 due to the increase in the cost of strategic projects and the increase in variable compensation expenses.
As a result of the aforementioned improvement in gross profit, EBITDA increased by US$14.8 million in the third quarter of 2021, from US$3.3 million in the third quarter of 2020 to US$18 million.
The revenue of AMG Critical Minerals increased by US$27.2 million, or 52%, to US$79.4 million, mainly due to the increase in sales of all three businesses and the increase in antimony sales prices.
As the revenue of each business unit increased, gross profit excluding non-recurring items increased by 25% in the third quarter. However, compared with the second quarter of 2021, energy and transportation costs in the third quarter of 2021 increased month-on-month and only partially passed on to customers.
SG&A expenses in the third quarter of 2021 increased by 1.3 million US dollars to 6.6 million US dollars, mainly due to the increase in personnel costs during the current period.
The EBITDA in the third quarter of 2021 was flat compared with the same period of the previous year, because the increase in personnel costs was offset by the above-mentioned improvement in gross profit.
AMG Key Materials Technology's revenue for the third quarter of 2021 increased by 38.1 million U.S. dollars, or 43%, compared to the same period in 2020. This increase was due to increased sales of titanium aluminides and chromium metals, as well as rising chromium prices. As a result, the gross profit before non-recurring items in the third quarter of 2021 increased by US$7.1 million, or 54%, to US$20.3 million.
Compared with the same period in 2020, the SG&A expenses in the third quarter of 2021 increased by US$800,000, or 5%, due to the increase in personnel costs, partially offset by the decrease in professional expenses this quarter.
AMG Key Materials Technology’s EBITDA increased to US$8.5 million in the quarter, compared to US$4.3 million in the third quarter of 2020. This is mainly due to the increase in profitability associated with the increase in sales of the aforementioned titanium aluminide and chromium metals.
The company signed a new order of US$27.9 million in the third quarter of 2021, which is equivalent to a book-to-bill ratio of 0.50 times. This low rate is mainly caused by time and seasonal factors, and it is expected that the increase in intake in the fourth quarter will be compensated, thereby normalizing the annual book-to-bill ratio. As of September 30, 2021, the backlog of orders was US$155.1 million, which was 19% lower than the US$190.6 million as of June 30, 2021. This was mainly due to the aforementioned order delays and the impact of the product mix. Due to the diversification outside the aerospace market, the company is experiencing more small orders, which reduces the end-of-term order backlog, but does not indicate a lower level of profitability.
AMG's income tax expense in the third quarter of 2021 was US$9.9 million, compared to a nominal expense in the same period in 2020. This difference is mainly due to the improvement in operating performance and changes in the Brazilian real. The impact of the Brazilian real resulted in a non-cash deferred income tax expense of USD 7.5 million in the third quarter of 2021 (2020: USD 2.1 million expense). The change in the Brazilian real exchange rate has affected the company’s valuation of the company’s net deferred taxes related to its Brazilian business.
AMG paid $4.1 million in taxes in the third quarter of 2021, compared to $10.7 million in the third quarter of 2020. The payments in the third quarter of 2020 are mainly the result of German final taxes related to the highly profitable 2018 tax year.
Profit (loss) for the period
AMG's loss of US$300,000 in the third quarter was negatively impacted by two major non-cash items: (1) Brazilian real resulted in a deferred tax expense of US$7.5 million in the third quarter of 2021. (2) Related inter-group balance sheet positions Our European cash pool arrangement incurred USD 1.8 million in foreign exchange expenses (after tax) in the third quarter of 2021. Excluding these non-cash items, the profit for the quarter was $9 million.
AMG's gross profit for the third quarter of 2021 was US$51.1 million, including special items, which are not included in the calculation of EBITDA.
A summary of the special items included in the gross profit for the third quarter of 2021 and 2020 is as follows:
Special items included in gross profit
During the quarter, the company incurred expenses for expansion projects that have not yet been put into operation. AMG is adjusting EBITDA for these special expenses.
As of September 30, 2021, AMG's net debt position was $265.3 million. This decrease was mainly due to the 3.1 million shares issued in April 2021 with a net income of US$119 million, but was offset by the significant investment in growth plans this quarter, especially our vanadium expansion in Ohio, which reduced AMG's restricted cash balance.
In the third quarter, AMG continued to maintain a strong balance sheet and sufficient liquidity sources. As of September 30, 2021, the company has unrestricted cash and cash equivalents of US$319 million, and a revolving credit line of US$170 million. Therefore, as of September 30, 2021, AMG's total liquidity is US$489 million.
AMG's net financial costs for the third quarter of 2021 were US$7.5 million, compared to US$4.5 million in the third quarter of 2020. This increase was mainly due to the increase in foreign exchange losses this quarter.
AMG capitalized $3.8 million in interest costs in the third quarter of 2021, the same as the previous year, driven by interest related to the company's tax-exempt municipal bonds, which support the expansion of Ohio vanadium.
AMG's SG&A expenses in the third quarter of 2021 were US$33.8 million, compared with US$29.6 million in the third quarter of 2020. The difference was mainly due to the increase in strategic projects and personnel costs. In response to the outbreak of the pandemic, efforts to reduce costs have reduced the initial personnel costs.
For 2021, we reiterate that we expect to improve EBITDA for the full year.
Given the current market conditions, we expect the full-year EBITDA of 2022 to exceed US$150 million, and as our vanadium expansion project accelerates, we expect to reach a quarterly operating rate EBITDA of US$50 million by the end of 2022.
Net loss for EBITDA reconciliation
(1) See note (1) of the key data sheet.
(2) The amount includes variable remuneration expenses settled in shares in 2021.
(3) The company's multiple strategic expansion projects are in the climbing stage, including the expansion project of AMG Vanadium, the joint venture with Shell, the hybrid lithium vanadium redox flow battery system, and the lithium expansion project in Germany. Projects were produced during this period cost. Quarter, but has not yet been put into operation. AMG is adjusting EBITDA for these special expenses.
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AMG is a global key materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metal and mineral products, and provides related vacuum furnace systems and services for transportation, infrastructure, energy, and specialty metals and chemical end markets.
AMG Clean Energy Materials combines our recycling and mining operations to produce materials for infrastructure and energy storage solutions while reducing the carbon dioxide footprint of suppliers and customers. Clean energy materials span the value chain of vanadium, lithium and tantalum. AMG Critical Materials Technologies combines our leading vacuum furnace technology series with high-purity materials to provide services to global leaders in the aerospace industry. AMG Critical Minerals includes our mineral processing business in antimony, graphite and metallic silicon.
AMG has approximately 3,000 employees worldwide, with production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique, and sales and customer service offices in Russia and Japan (www. amg-nv.com).
For more information, please contact: AMG Advanced Metallurgical Group NV 1 610 975 4979 Michele Fischer mfischer@amg-nv.com
Certain statements in this press release are not historical facts, but are "forward-looking." Forward-looking statements include AMG’s plans, expectations, forecasts, goals, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans and intentions related to acquisitions, AMG’s competitive advantages and disadvantages, Plans or goals related to predicted production, reserves, financial conditions, and future operations and development, AMG's business strategy, and AMG's anticipated trends in the industry and political and legal environments in which it operates, and other non-historical information. When used in this press release, "expects", "believes", "anticipates", "plans", "may", "will", "should" and similar expressions and their negative words are intended to identify forward-looking statements . By their nature, forward-looking statements involve inherent risks and uncertainties, including generality and specificity, and there are risks that forecasts, forecasts, forecasts and other forward-looking statements cannot be realized. These forward-looking statements were issued only on the date of this press release. AMG expressly disclaims any obligation or commitment to publicly release any updates or revisions to any forward-looking statements contained herein to reflect any changes in AMG’s expectations or any changes in the events, conditions or circumstances on which any forward-looking statements are based. .