Largo Inc T.LGO

Largo Reports First Quarter 2022 Financial Result

[SKiamforsure]

Largo Inc. has added a new press release to its website:

Largo Reports First Quarter 2022 Financial Results and Provides Adjusted 2022 Guidance; Announces Intention to Commence Normal Course Issuer Bid
All dollar amounts expressed are in thousands of U.S. dollars unless otherwise indicated.
Q1 2022 Highlights

• Revenues of $42.7 million, a 7% increase over Q1 2021; Revenues per pound sold¹ of $8.67, a 34% increase over Q1 2021 mainly due to stronger vanadium prices
• Cash provided before non-cash working capital items of $5.8 million, a 55% decrease over Q1 2021
• Net loss of $2.0 million vs. net income of $4.1 million in Q1 2021
• Total V₂O₅ equivalent sales of 2,232 tonnes vs. 2,783 tonnes in Q1 2021; Lower quarterly sales due to ongoing global logistical challenges and lower production in Q4 2021
• Cash balance of $78.4 million exiting Q1 2022; Net working capital² surplus of $124.7 million following increase in in-transit vanadium inventory
• V₂O₅ production 2,442 tonnes (5.4 million lbs³) vs. 1,986 tonnes (4.4 million lbs³) in Q1 2021
• Operating costs of $29.0 million vs. $28.2 million in Q1 2021, and cash operating costs excluding royalties per pound¹ of V₂O₅ equivalent sold of $3.97 vs. $2.87 in Q1 2021
• 2022 Guidance Update: The Company has increased its annual cash operating cost excluding royalties¹ guidance from $3.20 – 3.40 per lb sold to $3.90 – 4.30 per lb sold mainly due to a rise in input raw material costs, a stronger Brazilian currency estimate and lower production in Q1 2022; V₂O₅ equivalent production guidance lowered from 12,250 – 12,750 tonnes to 11,600 – 12,400 tonnes; V₂O₅ equivalent sales guidance lowered from 12,250 – 12,750 tonnes to 11,000 – 12,000 tonnes⁴
• Construction of the Company’s ilmenite concentration plant commenced in April as part of its previously announced titanium dioxide (“TiO₂”) pigment project. TiO₂ content is expected to be sourced from the vanadium ore created from the Company’s ongoing operations, which is expected to contribute to the Company's “two-pillar” business strategy as a low-cost vanadium supplier with an emerging vanadium battery business
• Configuration of Largo Clean Energy's (“LCE”) vanadium redox flow battery (“VRFB”) product development and stack manufacturing center, in Massachusetts, U.S. to be complete in May 2022; LCE began producing stacks and purifying electrolyte in the new facility with prospective customer visits having occurred in May 2022
• Largo Physical Vanadium (“LPV”) continued to make progress (see press released dated April 19, 2022) and is seeking all applicable regulatory and stock exchange approvals to become a publicly listed physical vanadium holding company that will purchase and hold physical vanadium to provide potential investors with ownership and exposure to vanadium
• The Company announces that it intends to commence a normal course issuer bid (“NCIB”) to purchase for cancellation its common shares (the “Common Shares”)
• Q1 2022 results conference call: Thursday, May 12th at 10:00 a.m. ET

Vanadium Market Update⁵

• Demand in all of the Company’s key markets remained strong in Q1 2022, which was reflected in strong price increases over the course of the period
• The average benchmark price per pound of V₂O₅ in Europe was $11.50 as of May 6, 2022, up approximately 31% since the start of 2022
• The average benchmark price per pound of V₂O₅ in Europe was $10.72 in Q1 2022, a 29% increase from the average of $8.30 seen in Q1 2021; The average benchmark price per kg of ferrovanadium (“FeV”) in Europe was $46.17 in Q1 2022, a 50% increase from the average of $30.87 seen in Q1 2021

[EnglishTickler]

At least Q2 looks like it's off to a good start... Jan/Feb/Mar: 2,232 tonnes sold. April:  I am pleased to report that our commercial sales team continued to capitalize on current strong vanadium market fundamentals by surpassing 1,200 tonnes of V2O5 equivalent sold in April.  sold 54% in one month of what they did in the first 3 months; plus got TiO2 going.

[ceetong]

Yes, sold. Unfortunately some of that was from inventory as PRODUCTION in April 2022 was 958 tonnes of V2O5 only.