China's Tianqi Lithium Corp, one of the world's top producers of lithium chemicals for electric vehicle batteries, on Friday reported its highest quarterly net profit since late 2018 thanks to higher lithium prices and one-off gains.
Tianqi swung to a July-September net profit of 444.01 million yuan (US$69.4 million) from a loss of 406.7 million yuan a year earlier, it said in a filing. That marked its best result since a 511 million yuan profit in the fourth quarter of 2018.
Chengdu-based Tianqi had returned to profit in the second quarter of 2021 after a downturn in lithium prices and liquidity shortages left the company in financial trouble and saw it post seven straight quarterly losses.
It secured a US$1.4 billion lifeline investment in its Australian operations from IGO Ltd late last year, allowing it to restructure some US$3 billion in debt.
The lithium market has also rebounded strongly, with battery-grade lithium carbonate prices in China more than doubling in July-September amid booming electric vehicle demand and now at a record high of 192,500 yuan a tonne.
Third-quarter revenue rose 177.8per cent year-on-year to 1.52 billion yuan, Tianqi said, attributing the increase mainly to higher prices and sales volumes of lithium products.
Daiwa Capital Markets analysts noted, however, that revenue was up only 5per cent from the second quarter despite the surge in lithium prices. They cited Tianqi management as saying there was no drop in sales volumes and a bigger impact on revenue would be seen in the fourth quarter.
Excluding one-off items, such as a 673 million yuan gain from debt restructuring, Tianqi would have posted a net loss of 122 million yuan in the third quarter, Daiwa said in a note.
Tianqi rival Ganfeng Lithium, the world's biggest lithium company by market capitalisation, this week reported a 507per cent rise in third-quarter net profit to a record 1.06 billion yuan.
(US$1 = 6.3975 Chinese yuan renminbi)
(Reporting by Tom Daly; editing by Jason Neely and Toby Chopra)