Sigma Lithium Reports $25 Million Quarterly Loss as Revenue Drops Over 50% In Q3 2024
Sigma Lithium Corporation (TSXV: SGML) released its financial results for Q3 2024, posting quarterly revenue of $20.9 million, a stark decline of 54.5% from $45.9 million in Q2 2024 and a significant drop compared to the $55.3 million posted in Q3 2023.
The sharp decline primarily resulted from a $23.3 million provisional pricing adjustment related to previous quarters’ sales, reflecting changes in Sigma’s commercial strategy and the impact of volatile lithium pricing. Excluding these adjustments, revenue from shipments invoiced during the quarter stood at $44.2 million, which remains a meaningful decline from the prior quarter’s comparable figure.
The company’s average CIF sales price for the quarter fell to $820 per tonne, down from $1,056 per tonne in Q2 2024 and $1,037 per tonne in Q3 2023. Compounding this issue, Sigma’s revenue per tonne after provisional adjustments dropped to just $415 per tonne, a steep decrease from $894 per tonne in Q2 and $943 per tonne a year earlier.
Operationally, Sigma delivered on its production targets, achieving output of 60,237 tonnes of lithium concentrate, slightly exceeding its guidance of 60,000 tonnes and marking a 22% increase from Q2 2024. Year-over-year, production surged by 38%, reflecting Sigma’s continued efforts to scale its operations.
Gross profit for Q3 2024 was negative $8.3 million, a sharp reversal from the $22.1 million gross profit posted in the same quarter last year. Gross margins were further pressured by the lower realized prices and increased provisional adjustments. Additionally, the company’s operating expenses, including general and administrative costs, totaled $5.2 million, further eroding profitability.
Cash unit operating costs on a CIF China basis averaged $513 per tonne, a marginal improvement from $515 per tonne in Q2 2024 and a notable achievement given inflationary pressures and logistical challenges. On an FOB Vitoria basis, which excludes ocean freight, Sigma reported costs of $449 per tonne.
Sigma reported a net loss of $25.1 million for the quarter, or $0.23 per diluted share, compared to a net income of $6.5 million in Q3 2023. The loss was largely driven by the $23.3 million in non-cash provisional pricing adjustments and weaker market pricing. Adjusted cash EBITDA for the quarter was negative $10.6 million, a significant decline from the positive $22.1 million reported in the same period last year.
The company ended the quarter with $66 million in cash and cash equivalents, down from $75 million in Q2 2024 but a modest improvement over the $60 million reported at the end of Q3 2023. Operating cash flow of $34 million during the quarter, driven by the collection of accounts receivable and reduced working capital needs, helped support this liquidity. Sigma also reduced its outstanding trade line debt by $40 million.
Looking to the future, Sigma is placing significant emphasis on its Phase 2 Greentech Plant expansion, which is expected to add 250,000 tonnes of annual production capacity.
Sigma Lithium last traded at $16.60 on the TSX Venture.
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