Sigma Lithium Reports Q2 2024: Sales Jump and Costs Drop
Sigma Lithium Corporation (TSXV: SGML) released its financial results for the second quarter ending June 30, 2024. The company’s performance was marked by significant strides in operational efficiency, with the company selling 52,572 tonnes of lithium concentrate.
This figure, while slightly down from the previous quarter, showcases Sigma’s capability to maintain high production levels consistently. The company projects an increase in sales to 60,000 tonnes in the third quarter, driven by enhancements in its Greentech plant.
Ana Cabral, Sigma Lithium’s Co-Chairperson and CEO, expressed satisfaction with the quarter’s results, highlighting the company’s operational rigor and strategic foresight. “We are extremely pleased to present Sigma’s robust financial results. This quarter, we achieved operational excellence on key fronts,” she noted.
Cabral emphasized the company’s commitment to maintaining a disciplined cost structure and expanding its market reach into new regions, including Japan and South Korea.
Financially, Sigma Lithium saw revenues total $45.9 million for the quarter, a 23% increase from the previous quarter’s $37.2 million. This revenue was driven by the company’s ability to command premium prices for its high-purity lithium concentrate, averaging a 10% price premium over its peers.
Cash costs averaged $364 per tonne at the industrial plant gate, positioning Sigma among the lower-cost producers in the lithium industry.
The company’s adjusted cash EBITDA reached $13.3 million, reflecting a margin of 29%, a significant improvement from the 16% margin reported in the first quarter of 2024. This was attributed to Sigma’s dynamic pricing strategies and stringent cost controls.
However, net income for the quarter stood at a loss of $10.8 million, influenced by non-cash currency adjustments amounting to $14.6 million.
Sigma’s liquidity position remains strong, with $75.3 million in cash and cash equivalents at the end of June, bolstered by the receipt of significant receivables post-quarter, pushing the cash balance up to $99 million by mid-August.
The company also reported $219 million in short-term loans and export prepayment liabilities, with a notable reduction in the cost of debt linked to export financing, dropping from 15% per year in January to less than 6% by the end of the quarter.
Looking ahead, Sigma Lithium expects increase in sales volume to 60,000 tonnes in the third quarter is anticipated to drive further reductions in unit costs, enhancing profitability. The company’s ongoing investments in its Greentech plant are expected to improve throughput and recovery rates, contributing to higher efficiency and lower costs.
Cabral remains optimistic about the future, highlighting the company’s strategic priorities: “We focused on increasing our robust cash margins, maintaining our draconian cost discipline culture, leading Sigma to achieve our 2024 cash cost guidance this quarter, ahead of schedule,” she stated.
Sigma Lithium last traded at $13.17 on the TSX Venture.
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