Charging up: Vulcan share price lifts 3% as cash balance surges

an investor looks happy holding a finger to his computer screen while holding a coffee cup in a home office scenario.an investor looks happy holding a finger to his computer screen while holding a coffee cup in a home office scenario.

The Vulcan Energy Resources Ltd (ASX: VUL) share price is in the green after the company updated the market on its performance over the June quarter.

The European-focused zero carbon lithium hopeful’s stock hit a high of $7.54 – a 5% gain – this morning. It has since slipped slightly to trade at $7.40, 3.06% higher than its previous close.

Vulcan share price gains on quarterly results

The following figures are converted from euros to Australian dollars at a rate of 1 euro to $1.46:

  • Receipts from customers totalled $2.3 million last quarter
  • Operating cash flow came to a $5.4 million outflow
  • The company benefited $72.9 million from financing activities, mainly from Stellantis’ investment
  • It ended the period with $255.9 million in cash

For comparison, Vulcan brought in 2.2 million euros (around $3.2 million at the above exchange rate) of customer receipts in the March quarter.

It ended the previous quarter with 155.6 million euros ($168.7 million) in cash.

What else happened in the June quarter?

A plethora of news wasn’t enough to save the Vulcan share price last quarter. It tumbled 47% over the three months ended 30 June.

Much of its downfall was exacerbated by a lithium sell-off in June despite news top-tier automaker Stellantis had snapped up $76 million worth of stock in the company at a 32% premium, as well as extending its offtake agreement.

On top of that, Vulcan signed a geothermal energy offtake agreement with a major German energy supplier and acquired new exploration licences, expanding its Upper Rhine Valley Brine Field licence area.

What did management say?

Managing director Dr Francis Wedin commented on the results boosting the Vulcan share price today, saying:

[Stellantis’] significant, premium investment in Vulcan and the Zero Carbon Lithium Project represents a strong statement by one of the world’s largest automakers regarding sustainable and strategic sourcing of battery materials.

The Vulcan team are working hard, focused on delivering the Zero Carbon Lithium Project at pace and scale … Our exploration and development teams continue to expand our Upper Rhine Valley Brine Field in response to customer demand.

What’s next?

Vulcan didn’t provide any new earnings guidance today. However, it did outline a number of its upcoming goals.

The company’s continuing to work towards its definitive feasibility study. It’s also aiming to increase its planned lithium production due to higher demand.

The company is also refurbishing its electric drill rigs ahead of operational readiness earlier next year and preassembly works for its sorption-demo plant are continuing.

Vulcan share price snapshot

The Vulcan share price has struggled through 2022 so far.

The stock has dumped 46% since the start of the year and 21% over the last 12 months.

In comparison, the All Ordinaries Index (ASX: XAO) has fallen 11% so far this year and 7% since this time last year.

The post Charging up: Vulcan share price lifts 3% as cash balance surges appeared first on The Motley Fool Australia.

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More reading

Motley Fool contributor Brooke Cooper has positions in Vulcan Energy Resources 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 Scott Phillips.

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