Li-Cycle Q4 revenues fell 32% on low metals prices; Rochester hub on track

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Lithium-ion battery recycler Li-Cycle saw revenues fall 32% in its fourth quarter due to a fall in metals prices, while its Rochester hub in New York state is on track for a late 2023 opening.

Li-Cycle had revenue from product sales and recycling services of US$3.5 million in the three months to October 31, 2022, the end of its financial year. That is 14.6% lower than the US$4.1 million it recorded in the same period the previous year, which it attributed to the decrease in metals prices, primarily cobalt.

These figures exclude the effect of what the firm described as a “non-cash fair market value (FMV) pricing adjustment of $0.5 million, relating to end-of-period metal prices for prior-period black mass sales”.

Including the effect of the FMV, quarterly revenue fell 31.8% year-on-year, from US$4.4 million to US$3.0 million. The unfavourable FMV pricing adjustment of US$0.5 million compares to a ‘favourable’ one of US$0.3 million for the prior year’s Q4.

The price of cobalt fell 11.5%, from US$60,407/tonne at the end of Q4 2021 to US$53,462 in Q4 2022. Nickel was comparatively stable.

The two factors offset higher sales of black mass, the metals-rich product of the first stage of recycling lithium-ion batteries.

Revenue still grew substantially for the whole financial year, up 140% from a year earlier to US$15.6million excluding FMV effects in each period, and up 83% to US$13.4 million including FMV effects.

The company operates a hub and spoke model. Four operational ‘spoke’ recycling facilities turn battery packs into black mass in Arizona, Alabama, New York and Ontario, which is then sold in the market. It is also building spokes in Germany and Norway.

Once its planned major ‘hub’ recycling facility opens in Rochester later this year, part of that black mass will be sent there for processing into individual metals. By 2024, most of the black mass will be sent there.

The company has a targeted investment budget of US$486 million for the Rochester hub.

The combined recycling capacity of these facilities will reach 80,000 tonnes of lithium-ion battery material input/year by the end of 2023, versus a current capacity of just over 50,000 tonnes.

Operating expenses doubled in Q4 to US$39.4 million as Li-Cycle continued to expand its operations in North America and Europe, resulting in a net loss for the quarter of US$33.9 million. The prior year’s Q4 net loss included a non-cash loss related to its SPAC listing making a comparison meaningless.

The company ended its financial year with US$578.3 million in cash, down 11% from the previous quarter.

See all previous Energy-Storage.news coverage of the company here.

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