Brisbane-based lithium explorer Orocobre has released strong financial results for the 2018 financial year (FY2018), posting records for both revenue and underlying net profit after tax.
Revenue was up 24 per cent to $US148.9 million ($202.9 million) from June 30, 2017 to June 30, 2018, while underlying net profit was up to $US25.7 million.
In addition, the company achieved a record sales price average of $US12,578 per tonne (t) across 11,837t from the Olaroz joint venture (JV) in northern Argentina, up 29 per cent on the $US9763/t figure posted in FY2017.
The company’s flagship, the Salar de Olaroz lithium facility is a JV between Orocobre’s SIngapore-based holding company Sales de Jujuy (91.5 per cent) and JEMSE (8.5 per cent).
Sales de Jujuy’s ownership is split between Orocobre, which owns 72.68 per cent, and Toyota Tsusho, which holds a 27.32 per cent non-controlling interest (NCI).
The project focuses on high-quality brine lithium extraction and is currently planning to move into Stage 2 expansion at an estimated cost of $US75 million.
Orocobre managing director and chief executive officer Richard Seville said that construction on the first ponds for Stage 2 had been completed and are currently being used in Stage 1 operations.
“In 2018, Orocobre demonstrated significant progress in operational performance especially improvements in pond management,” he said.
“These improvements came at a fortuitous time, with contract lithium chemical prices rising throughout the year. Management of costs, along with strong prices resulted in record gross cash margins for our products and fuelled a 33 per cent increase in our operating cashflow from Olaroz.
“We still had our challenges during the year with inclement weather affecting our annual production and we are taking these experiences into account with our design of Stage 2 with increased pond areas, the potential use of crystalliser/evaporators and other measures.”
Conversely, the company’s boron production through subsidiary Borax Argentina was less robust. While the company achieved record production at its Tincalayu and boric acid plant at Campo Quijano, carrying value of Borax’s plant and equipment was written down to nil for 2018.
“While Borax Argentina S.A. improved its performance in FY18, low product prices throughout the year and the poor Brazilian economic environment continued to affect the financial results,” said Orocobre chair Robert Hubbard in the company’s annual statement.
“In recognition of this we have taken the decision to write-down the value of plant and equipment at Borax to nil.
“To enable continuous improvement despite these external pressures, Borax maintains its focus on customer and product development and improved operational performance.”