The Allkem Ltd (ASX: AKE) share price will face market attention after the ASX lithium share reported its FY23 result.
Allkem has projects located in Australia, South America and North America.
Allkem share price
FY23 result
Here are some of the highlights from the 12 months to June 2023:
- Revenue grew by 62% to US$1.2 billion
- EBITDAIX (EBITDA explained, the IX stands for exploration costs) increased 78% to US$910 million
- Net profit after tax (NPAT) rose 57% to US$525 million
- Net cash balance of US$648.4 million
The lithium business said that its Olaroz lithium facility saw record annual production of 16,703 tonnes, which was up 30% year on year. The average realised price for lithium carbonate almost doubled year on year to US$43,981 per tonne.
Mt Cattlin produced 130,984 dry metric tonnes (dmt) of spodumene concentrate (raw lithium), with the average price for spodumene increasing 2.2x year on year to US$4,879 per tonne.
Project progress
The business gave an update about a number of its projects. Progress on (and completing) projects can help push the Allkem share price higher.
It said that Olaroz Stage 2 achieved its first wet production in mid-July with commissioning to continue to ramp up over the next 12 to 18 months.
Naraha achieved its first production of lithium hydroxide in late 2022 and battery grade qualification started with customers in July.
The Olaroz resource increased to 20.7mt LCE, “providing excellent expansion potential.”
Sal de Vida was issued EIA approval from the Catamarca government enabling the planned 15kt per annum production capacity.
Federal approval for the James Bay ESIA was obtained in January 2023 and a new high-grade zone of mineralisation was identified.
Outlook for the Allkem share price
The business is raking in cashflow and says its current balance sheet can fund its projects.
Allkem is working through the merger process with Livent which aims to create a leading globally integrated lithium chemicals producer, which will deliver on the ASX lithium share’s downstream strategy, and deliver faster and lower-risk growth.
A shareholder meeting to vote on the merger is expected to occur later in the year.
The company seems to be doing all the right things to deliver operational and financial growth, which should be helpful for shareholders over the long-term. Without a time machine it’s difficult to say if today’s value is as good as it gets, but if the lithium price remains strong, this ASX lithium share should have a good future.
