Dynamic global lithium chemicals supplier, Orocobre Limited (ASX: ORE) has released its half-year results for FY 2019. For the half-year period, the company has reported a profit of US$24 million which is US$8.2 million higher than the previous corresponding period (pcp). Profit for the first half of the year includes a tax benefit of US$15.2 million and a foreign exchange charge of US$7.9 million. Further, the company has reported total production of 6,075 tonnes of lithium carbonate during 1HFY19.
The company produced strong results from its Olaroz Lithium Facility, located in northern Argentina. From the Olaroz Lithium Facility, the company reported revenue of US$63.5 million, on sales of 5,163 tonnes of lithium carbonate. Further, the company reported EBITDAIX of US$36.6 million, after deducting export tax of US$2.9 million. During the half year period, the company received an average price of US$12,295/tonne which is US$11,415/tonne higher than pcp. From the Olaroz Lithium Facility, the company reported gross operating margins of 65% with lithium production costs at US$4,251 per tonne, excluding royalties and corporate costs making Olaroz one of the lowest cost producers of lithium chemicals in the world. Further, the company reported gross cash margin of US$8,044per tonne, up from US$7,079/tonne in pcp.
As of 31 December 2018, the company had available cash of US$284 million. Including SDJ and Borax cash and project debt, net group cash is US$207.7 million. Orocobre Managing Director and CEO, Mr. Martín Pérez de Solay has commented that Orocobre has continued to bolster its position as a mainstream, profitable, low-cost producer of lithium carbonate.
During the fourth quarter of FY 2018, Orocobre signed three pivotal agreements with its joint venture partner Toyota Tsusho Corporation (TTC) – a new Olaroz Shareholders Agreement, Sales and Marketing Agreement and Orocobre Management Agreement. The Company has started the Construction activities for its Stage 2 Expansion of the Olaroz Lithium Facility with the development of key items such as production boreholes, a secondary liming plant, evaporation/harvest ponds, roads and camp upgrades.
For the March 2019 quarter, the company is expecting the average sales price to be around US$9,000 per tonne (FOB). The company is expecting that its full-year production (FY19) will be approximately the same as achieved in FY18. From Borax Argentina, the company is expecting its production to be around 35,000 - 40,000 tonnes for FY19 with Capital expenditure of ~US$1-2 million.
Now, let us have a quick look at Orocobre Limited’s stock performance and the return it has posted over the last few months. The company’s stock is currently trading at a price of $3.290, down by 3.235% during the day’s trade with a market capitalization of ~$889.21 Mn as on 22 February 2019 (AEST 1:13 PM). The counter opened the day at $3.400, reached the day’s high of $3.410 and touched the day’s low of $3.200. ORE’ Shares have provided a Year Till Date return of 7.26 percent. It had a 52-week high price of $6.990 and touched 52 weeks low of $2.910, with an average volume of 1,099,998 approximately.
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