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Orocobre Limited Reports H1 FY20 Results

GlobeNewswire - Thu Feb 20, 5:28PM CST

Orocobre Limited (ASX: ORE, TSX: ORL) (Orocobre or the Company), a dynamic global lithium chemicals producer, provides its financial results for the half year ended 31 December 2019 (H1 FY20).

Highlights:

-- Statutory consolidated group net loss of US$18.9 million for H1 FY20 is down from a profit of US$24.1 million in the previous corresponding period (PCP). The underlying net loss after tax for the group is US$9.9 million with adjustments for impairment, foreign exchange and other one-off items

-- Attributable group EBITDAIX is US$0.2 million, down from US$21.0 million, due mostly to lower product pricing

-- Total production of 6,679 tonnes of lithium carbonate, up 10% on pcp with improvements in operational performance

-- Positive results from the Olaroz Lithium Facility:

    -- revenue of US$39.4 million, on sales of 6,395 tonnes of lithium carbonate (up 24% on pcp)

    -- revenue of US$39.4 million, on sales of 6,395 tonnes of lithium carbonate (up 24% on pcp)

    -- EBITDAIX of US$6.1 million, down from US$36.6 million mostly due to price

    -- average price received of US$6,157/tonne FOB, down from US$12,295/tonne FOB in PCP

    -- gross operating cash margins of 25% with lithium production costs of US$4,643/tonne. Olaroz remains one of the lowest cost producers of lithium chemicals in the world

    -- gross cash margin of US$1,514/tonne, despite lower prices

    -- As of 31 December 2019, Orocobre Group (corporate + 100% SDJ PTE) had cash of US$195 million

    -- Long term contracts announced for battery grade lithium carbonate.

    -- Material progress is being made with the construction of the Stage 2 Expansion of the Olaroz Lithium Facility which is 25% complete and Naraha Lithium Hydroxide Plant which is 40% complete

    -- Orocobre and Advantage Lithium have entered a definitive agreement for Orocobre to acquire all issued and outstanding shares of Advantage Lithium that Orocobre does not already own. If approved, this will allow Orocobre to continue to develop the Olaroz/Cauchari basin in a cost-effective manner that will optimise extraction of the resource to the benefit of all stakeholders.

    Orocobre Managing Director and CEO, Mr Martin Perez de Solay said, "Orocobre has continued to deliver positive operating margins despite weaker market conditions.

    "Our operating strategy retains a focus on safety, quality and productivity which is delivering improved operating results and ensuring we remain a profitable, low cost producer of lithium carbonate.

    "Cost management is paramount and towards the end of the half we have implemented further cost saving initiatives at Olaroz and across the rest of our business through the elimination of non-essential contractors, travel and similar expenses.

    "Construction of our growth projects is progressing in line with expected schedules at the Naraha Lithium Hydroxide Plant and the Stage 2 expansion of Olaroz," he said.

    Outlook, Guidance and Data

    Subject to market and operating conditions Orocobre provides the following guidance:

    Olaroz Lithium Facility

    -- Orocobre expects full year production (FY20) will be at least 5% higher than FY19

    -- Orocobre expects the average sales price for the March 2020 quarter to be approximately US$5,000 per tonne (FOB)

    Borax Argentina

    -- Production forecast of 40,000 - 45,000 tonnes for FY20

    Corporate

    -- Cash corporate costs will be US$8.5 - 9.5 million, including costs related to the Stage 2 Expansion and the Naraha Lithium Hydroxide Plant

    Consolidated Profit and Loss

    Group                          Olaroz (100%)
                                                       31 Dec 2019      31 Dec 2018   31 Dec 2019     31 Dec 2018
                                                       US $'000         US $'000      US $'000        US $'000
    Summary of results for the half year ended
    31 December 2019
    Revenue                                            48,966           9,285         39,375          63,480
    EBITDAIX 1                                         2,144            (3,308      ) 6,079           36,571
    Less depreciation & amortisation                   (8,307         ) (18         ) (7,771      )   (4,435      )
    EBITIX 2                                           (6,163         ) (3,326      ) (1,692      )   32,136
    Less interest                                      (6,178         ) 6,902         (11,944     )   (10,878     )
    EBTIX 3                                            (12,341        ) 3,576         (13,636     )   21,258
    Less impairment                                    (5,890         ) (188        ) (1,063      )   -
    Less foreign currency loss                         (7,691         ) (3,321      ) (5,147      )   (6,828      )
    Less share of associate losses                     (639           ) (769        ) -               -
    Add share of profit of joint ventures, net of tax  -                24,752        -               -
    Segment (loss)/profit for the half year before tax (26,561        ) 24,050        (19,846     )   14,430
    Income tax                                         7,618            -             7,618           21,167
    Net (loss)/profit                                  (18,943        ) 24,050        (12,228     )   35,597

    This announcement has been approved by the Orocobre Limited Board of Directors

    Andrew Barber

    Chief Investor Relations Officer

    Orocobre Limited

    T: +61 7 3871 3985

    M: +61 418 783 701

    E: abarber@orocobre.com

    W: www.orocobre.com

    https://twitter.com/OrocobreLimited

    https://www.linkedin.com/company/orocobre-limited

    https://www.facebook.com/OrocobreLimited/

    https://www.instagram.com/orocobre/

    https://www.youtube.com/OrocobreLimited

    Click here to subscribe to the Orocobre e-Newsletter

    Notes:

    Unless otherwise stated, all financial data in this release is quoted in US dollars.

    Orocobre's results are reported under International Financial Reporting Standards (IFRS). This report also includes certain non-IFRS financial information, including the following:

    -- NCI is the non-controlling interest which represents the portion of equity ownership in SDJ PTE

    -- EBITDAIX is 'Earnings before interest, tax, depreciation and amortisation, impairment and foreign currency gains/(losses), share of associate losses and share of profit from joint ventures'

    -- EBITIX is 'Earnings before interest, tax, impairment and foreign currency gains/(losses), share of associate losses and share of profit from joint ventures'

    -- EBTIX is 'Earnings before tax, impairment and foreign currency gains/(losses), share of associate losses and share of profit from joint ventures'

    -- 'underlying NPAT' and 'underlying EBITDAIX' being statutory profit being adjusted for certain one off and non-recurring items

    About Orocobre Limited

    Orocobre Limited (Orocobre) is a dynamic global lithium chemical supplier and an established producer of boron. Orocobre is dual listed on the Australia and Toronto Stock Exchanges (ASX:ORE), (TSX:ORL.TO). Orocobre's operations include its Olaroz Lithium Facility in Northern Argentina, Borax Argentina, an established Argentine boron minerals and refined chemicals producer and a 34.7% interest in Advantage Lithium. The company has commenced an expansion at Olaroz and construction of the Naraha Lithium Hydroxide Plant in Japan. For further information, please visit www.orocobre.com.

    see notes at end of release.

    Orocobre reports price as FOB (Free on Board) which excludes insurance and freight charges included in CIF (Cost, Insurance, Freight) pricing. Therefore, the Company's reported prices are net of freight (shipping), insurance and sales commission. FOB prices are reported by the Company to provide clarity on the sales revenue that is recognized by Sales de Jujuy S.A., the joint venture company in Argentina managing the Olaroz Lithium Facility.

    excluding royalties, export taxes and head office costs.

    Financial data has been translated to US Dollars using average exchange rates for the relevant period in the income statement.

    https://ml.globenewswire.com/media/88bf64ae-99a3-4359-b256-503f2cce73cf/small/orocobre-logo-rgb-png.png

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