Zhitong Financial APP has learned that the world's largest manufacturer of lithium for electric vehicle batteries$Yabao (ALB.US) $On Wednesday, it raised its annual forecast and reported a better-than-expected quarterly profit after the company renegotiated its lithium supply contract at a higher price. The result reflects the growing demand for lithium as the auto industry begins to shift its manufacturing base to electric cars, a shift that gives mining companies huge pricing power.
As of press time, Aspo rose nearly 5% to $251.48 before trading.
In terms of results, second-quarter net sales were $1.48 billion, analysts expected $1.43 billion, net profit was $406.8 million, compared with $424.6 million a year earlier, and adjusted earnings per share were $3.45 and analysts expected $3.05. earnings per share were $3.62 in the same period last year. It is worth mentioning that compared with last year, Yabo now expects the price of its lithium to rise by at least 225% in 2022, and the adjusted profit of its lithium division will increase by at least 500%.
In addition, the company's bromine division sells chemicals used for fire extinguishers and profits have increased significantly as a result of the rising price of bromine. Although the adjusted profit of the company's lithium business has more than quadrupled, the adjusted profit of the catalyst business sold to the oil refining industry has fallen by more than 50%.
It is understood that Kent Masters, CEO of Yabao, said: "We have changed our lithium contract strategy in order to benefit more from these strong market developments." The company said its lithium production should grow by at least 20% this year, and expansion projects in Chile, Australia, China and the United States are proceeding as planned or ahead of schedule. Executives plan to hold a conference call on Thursday to discuss quarterly results.