"Affected by fluctuations in the lithium product market, the company's sales prices for lithium products have dropped significantly from the same period last year, and gross profit margins for lithium products have also decreased significantly." We all knew that. That is no news.
"Due to the mismatch between the pricing mechanisms of the company's controlling subsidiary, Tailison Chemical Grade Lithium Concentrate, and the company's lithium chemical product sales, the company's operating performance has incurred periodic losses during the reporting period." Expected news. All the raw material bought at the high prices of 2023 but that has been converted to chemicals and sold in 2024 at low prices was going to produce temporary losses.
"However, in the first half of 2024, the market price of chemical grade lithium concentrate decreased. With the gradual entry of low-priced lithium concentrate newly purchased by Tailison and the gradual digestion of existing lithium concentrate inventory, the out-of-warehouse cost of chemical grade lithium concentrate at various production bases of the company gradually approached the latest purchase price, and the periodic mismatch of the lithium concentrate pricing mechanism also gradually weakened, resulting in a decreased loss in the company's second quarter of 2024 compared to the first quarter. " So as purchasing prices adjusted so did net incomes.
"At the same time, due to the positive influence of the smooth ramp-up of in-house factories and outsourcing, the production and sales of lithium compounds and derivatives in the first half and second quarter of 2024 achieved year-on-year and quarter-on-quarter growth." ...Wait... The company is making losses... but they are producing and selling more YoY and QoQ... Could some of you, downrampers, give advice to these little people that they are going deeper into losses... There is no demand... Prices are very low, and going lower.... Oh dear, Tianqi must be run by the same brigade with rose-coloured glasses that is invested in LTR...
"As of the announcement date of the performance forecast, the company's important associate, SQM, has not yet announced its performance report for the second quarter of 2024. Taking into account all reliable information that can be obtained, the company used its financial estimation model and Bloomberg's projected earnings per share for SQM in the second quarter of 2024 as a basis to calculate the investment income of the company in SQM during the same period. In addition, SQM disclosed in its first quarter 2024 performance report that the Santiago Court of Appeals in Chile ruled on its tax litigation for the 2017 and 2018 tax years in April 2024, revoking the ruling of the tax and customs court on November 7, 2022, resulting in a recognized income tax expense of approximately $1.1 billion and a corresponding decrease in net income of approximately $1.1 billion."
So at the end, a big cake in the losses is due to legal issues in brine production salars...
LTR Price at posting:
93.0¢ Sentiment: Hold Disclosure: Held
(20min delay)