AMG sees lower 2024 target, cuts headcount as lower lithium prices weigh (updated)

AMG Critical Materials NV

21/02/2024 18:10

(Adds details on staff cuts, background on strategy from
paragraph 2)
    By Dagmarah Mackos
       Feb 21 (Reuters) - Miner and lithium supplier AMG
Critical Materials  AMG.AS  on Wednesday cut its core profit
guidance for 2024 and said it would reduce its headcount, as it
expects lower prices to hit profits from its lithium and
vanadium businesses. 
    The group now expects adjusted earnings before interest,
taxes, depreciation and amortisation (EBITDA) of around $130
million for the full-year compared with $200 million it expected
previously. 
    The cut was due to lower prices of lithium and vanadium,
with profits from each expected to drop this year by $60 million
and $10 million respectively.
    AMG has been betting on lithium production and is developing
its supply chain of the key metal for electric vehicle (EV)
batteries but glut of global inventory has weighed on prices.
    The group also plans to reduce headcount by around 200 as
part of its ongoing cost reduction programme, around 5.6% of its
staff.
    The reductions will be offset by the expansion ramp-up of
its two main lithium projects at its sites in Germany and
Brazil, and growth in its LIVA batteries and engineering
businesses, it added. 
    "We are reviewing our resource development projects and all
other expansion activities in light of the present market
conditions," AMG said in a statement. 
    For 2023, the group posted adjusted earnings before
interest, tax, depreciation and amortization (EBITDA) of $350.5
million, against guidance of around $320 million.
    

 (Reporting by Dagmarah Mackos; editing by Philippa Fletcher)
 ((dagmarah.mackos@tr.com))