Q4-22 = another disaster? Q3-22 Sales = 2,796T = 6,164,118 lbs
Q3-22 Revenue = US$54.3M
Q3-22 Revenue per pound sold = US$8.80/lb
Q3-22 Net Loss = (US$2.6M) or (US$0.04/share)
How can a leading primary producer of Vanadium manage to get hit with a basic loss per share of US$0.04 out of an average revenue per pound of US$8.80?
Sales Q1 + Q2 + Q3 = 8,319T
To meet the 2022 Sales Guidance (11,000T - 12,000T), Largo must sell between 2,681T and 3,681T in Q4-22. In October Largo sold 1,056T. So let’s assume that Q4 Sales = 3,000T.
During Q3-22, the average benchmark price per lb of Euro V2O5 was US$8.23 while Largo’s revenue per pound was US$8.80.
The average benchmark price went down to US$8.00/ lb in September. Vanadium prices have decreased further since then. However let’s assume for the sake of argument that Largo’s Q4-22 revenue per pound = US$8.00.
Q4-22 estimation:
Q4-22 E-Sales = 3,000T = 6,613,860 lbs
Q4-22 E-Revenue/lb = US$8.00
Q4-22 E-Revenue = US$53M
US$53M = less than Q3-22 actual revenue of US$54.3M.
So is there a likelihood of Q4-22 being another disaster?