Allkem (ASX:AKE) up over 7% on plans to boost lithium produce

3 min read | April 14, 2022 11:23 AM AEST | By Sukriti Nair

Allkem (ASX:AKE) up over 7% on plans to boost lithium produce — Image source: © Xura | Megapixl.com

Highlights

Allkem has plans to increase lithium production three-fold by 2026.

The company has recorded 40% increase in lithium carbonate production capacity.

Allkem Limited’s revenue for the March quarter stands at US$235 million.

Australian lithium miner, Allkem Limited (ASX:AKE), has shared its March 2022 quarterly activities report today on the ASX.

In the reported March quarter, Allkem’s group revenue is reported to be US$235 million. Also, group's gross operating cash margin stands at around US$189 million.

The strong demand for lithium chemicals and spodumene concentrates in 2021 seem to have benefitted the company.

With the continuing supportive demand, supply and price dynamics, Allkem is planning to increase its production 3-fold by 2026. In the currently reported March quarter, Allkem sold 66,011 dmt (dry metric tonne) spoduemene concentrate at an average sales price of US$2,178 dmt.

On the ASX, as of Thursday 14 April 2022, AKE share price was at AU$14.21 a share, up about 7.16% at around 10:36 AM AEST.

Allkem’s share price performance on the ASX

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Allkem’s operational snapshot for March quarter 2022

During the March quarter, Allkem’s Mt Cattlin project generated a record revenue of US$143.8 million from its production and sales. The gross cash margin remained 84% based on average pricing. In the June quarter Allkem has even secured a higher pricing for an increased produce.
At its Olaroz Lithium Facility too, Allkem generated a record revenue of US$86 million with a gross cash margin of 86% for its battery grade lithium carbonate. The lithium carbonate prices for the upcoming quarter are expected to be higher.

Allkem’s financial snapshot for March quarter 2022

Pushed by high lithium demand and sales prices, Alkem’s group revenue in the March quarter was about US$235 million and group gross operating cash margin was around US$189 million.
As at 31 March 2022, the group cash was US$421.3 million and a further US$73.4 million of cash was collected in early April from a Mt Cattlin shipment.
As a result, Allkem with a strong balance sheet and future expected cashflows, seems well-poised to deliver its growth strategy.

Allkem’s road ahead

Allkem acknowledged the fact that a steep rise in Omicron cases globally can continue to impact operations and development activity in the near-term. However, to handle the strong global demand and tight supply in the EV battery markets for lithium might be helpful for Allkem.

Also read- Why Core Lithium (ASX:CXO) slipped on the ASX today?

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