How are Allkem’s (ASX:AKE) shares reacting to quarterly update?

October 20, 2022 08:13 PM PDT | By Sonal Goyal

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Image source: © Timonschneider | Megapixl.com

Key highlights of the quarterly update

Production at the Olaroz Lithium facility increased by 17% on prior corresponding period (pcp).
The company reported lithium carbonate sales of 3,721 tonnes during the quarter which generated revenue of circa US$150 million.
The group revenue in three months was AU$298 million.
The gross operating cash margin was 82%.
Net cash at the end of the quarter was US$447 million.

Allkem’s expectations

Allkem expects the weighted average price for third-party sales of lithium carbonate products in the next quarter to be approximately 15% higher than this quarter.
In the December quarter, the company expects to see spodumene concentrate pricing be in line with the September quarter.
At Olaroz Stage 2, the capital expenditure is expected to increase by around 12%, excluding working capital and VAT. Reportedly, it will be funded via operating cashflows.
At Naraha, the first production is expected in the December quarter.
The company expects Olaroz Stage 2 production during the first half of 2023.
Sal De Vida is anticipated to begin production in late 2023. Production at James Bay is expected in mid-2024.
The forecasted production at Mt Cattlin for FY23 was revised in late August to 140kt-150kt of spodumene concentrate because of equipment and ongoing labour shortage.

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