Mr. Martin Perez de Solay reports

FY23 FULL YEAR RESULTS DELIVER RECORD PROFIT OF US$524.6 MILLION

Allkem Ltd. has provided financial results for the Allkem Group for the year ended June 30, 2023. All monetary amounts are in United States dollars.

Highlights

• Record annual group revenue of $1,207.8-million achieved, a approximately 1.6 times increase year on year (YoY);
• Excellent operating performance and highly supportive market conditions generated group gross profit of $1,065.8-million with group EBITDAIX (earnings before interest, taxes, depreciation, amortisation, impairment, merger costs, gains from financial instruments, foreign currency gain/(losses), share of associate losses, business combination acquisition costs and non-cash business combination adjustments) of $909.8-million and consolidated net profit after tax from continuing operations of $524.6-million;
• The Olaroz lithium facility achieved record annual production of 16,703 tonnes, approximately 30-per-cent higher YoY and from the prior record in fiscal 2022;
• Record revenue at Olaroz increased 102 per cent to total $592.2-million on sales of 13,186 tonnes of lithium carbonate including $12.3-million of revenue generated from byproduct sales;
• Average realized pricing for lithium carbonate almost doubled YoY to $43,981/tonne FOB. The gross cash margin of 89 per cent remains robust;
• Mt. Cattlin produced 130,984 dry metric tonnes (dmt) of spodumene concentrate with significant operational improvements made by year-end;
• Record revenue at Mt. Cattlin of $615.6-million, a 36-per-cent YoY increase which includes $513.7-million generated from spodumene sales of 105,291 dmt and $99.7-million revenue generated from low-grade sales;
• Average price for spodumene increased by approximately 2.2 times YoY to $4,879/tonne CIF. Gross cash margin of 78 per cent was similar to fiscal 2022;
• Strong cash generation and existing net cash balance of $648.4-million is expected to fully finance committed projects.

Development projects

• Olaroz stage 2 achieved first wet production in mid-July with commissioning to continue and ramp up over the next 12 to 18 months;
• Naraha successfully achieved first production of lithium hydroxide in late 2022 and battery grade qualification commenced with customers in July;
• The Olaroz resource increased 27 per cent to 20.7 million tonnes LCE (lithium carbonate equivalent) providing excellent expansion potential;
• Mt. Cattlin's ore reserve update confirmed an additional four-to-five-year mine life to 2027 to 2028;
• Sal de Vida was issued EIA approval from the Catamarca government enabling the planned 15,000-tonne-per-annum production capacity. A resolution was issued permitting the construction of the solar farm and water easements were issued;
• The liner installation has been completed on the first two strings of ponds at Sal de Vida stage 1, earthworks for string 3 are under way, and construction of the carbonation plant has commenced;
• Federal approval for the James Bay ESIA was obtained in January, 2023, and a new high-grade zone of mineralization was identified;
• Postreporting period the total resource at James Bay increased 173 per cent to 110.2 Mt at 1.30 per cent Li2O.

Allkem managing director and chief executive officer Martin Perez de Solay says:

"We have achieved outstanding full year results and demonstrated the quality and profitability of our operations. FY23 revenue and EBITDAIX hit new records and were underpinned by record production at Olaroz and strong performance at Mt. Cattlin, which achieved record run rates towards the end of the year.

"Our team has reached significant milestones to capture global growth by increasing our production capacity and product offering. Amidst strong demand for lithium we delivered first production at the Naraha lithium hydroxide plant and achieved first production at Olaroz stage 2. Sal de Vida construction is well under way, and James Bay is advancing with approvals received by the federal government for the ESIA.

"With two revenue-generating operations being supplemented in the near future by Olaroz stage 2 and a strong balance sheet, we are fully funded to complete construction at Sal de Vida and the development of James Bay.

"Our strategy to create a leading global integrated lithium chemicals producer will be accelerated by the proposed merger with Livent."

Group profit overview

The Allkem Group produced a group EBITDAIX of $909.8-million (2022: $512.0-million) and total profit for the year from continuing operations of $524.6-million (2022: $334.7-million). The total profit for the year from continuing operations includes one-off charges of $9.9-million related to merger with Livent, gains of $66.0-million from financial instruments and foreign exchange losses of $83.3-million. Net finance income was $48.2-million.

Net assets of the group increased to $3,573.8-million as at June 30, 2023 (June 30, 2022: $3,081.4-million), including total cash balances of $821.4-million (June 30, 2022: $663.5-million).

Group capital expenditure for the year totalled $502.9-million (June 30, 2022: $238.7-million) and the Mizuho loans were reduced by $37.6-million.

We seek Safe Harbor.