The Allkem Ltd (ASX: AKE) share price will be one to watch on Thursday.
This follows the release of the lithium miner’s quarterly update this morning.
Allkem share price on watch amid record revenue
For the three months ended 31 March, the company revealed that Mt Cattlin produced 48,562 dry metric tonnes (dmt) of spodumene concentrate and shipped 66,011 tonnes. And thanks to average pricing of US$2,178 per dmt, this led to the Mt Cattlin operation generating record revenue of US$143.8 million for the three months.
Though, that record is unlikely to stand for long. Management is expecting the Mt Cattlin operation to average a price of US$5,000 per dmt on sales of 50,000 dmt during the fourth quarter.
It is a similar story for Allkem’s Olaroz Lithium Facility. It produced 2,972 tonnes of lithium carbonate with sales of 3,157 tonnes during the quarter. And with Allkem commanding US$27,236 per tonne for its lithium carbonate, this led to record revenue of ~US$86 million from Olaroz.
Once again, with management forecasting an average second half lithium carbonate price of US$35,000 per tonne, this record looks unlikely to stand for very long.
Another positive which could boost the Allkem share price today is the company’s cash margin. It reported a cash margin of 84% at Mt Cattlin and 86% at Olaroz, which means these operations are generating significant cash based on current prices.
In fact, management revealed that group revenue for the quarter was approximately US$235 million with a group gross operating cash margin of approximately US$189 million.
This left Allem with a cash balance of US$421.3 million at the end of March, with a further $73.4 million collected in early April from a March shipment. Management believes this and its future cashflow will fund the delivery of its growth strategy.
The post Allkem share price on watch following record-breaking third quarter appeared first on The Motley Fool Australia.
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More reading
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- Here’s why the lithium price is in the spotlight today
Motley Fool contributor James Mickleboro owns Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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