Last year, the company's profit for the third quarter was 1.646 billion yuan. The company announced that the main reason for the decline in performance was the significant overall decline in lithium product market prices. In addition, the misalignment of pricing mechanisms further exacerbated this situation
On Thursday, Tianqi Lithium released its Q3 performance forecast, with a significant decline in company performance. It is expected that the net profit for the first three quarters of 2024 will be a loss of 5.85 billion to 5.45 billion yuan, compared to a profit of 8.099 billion yuan in the same period last year.
The company announcement stated that the main reason for the decline in performance is the significant overall decline in lithium product market prices, exacerbated by a misalignment in pricing mechanisms.
1) Forecast for this period
- It is expected that the net profit attributable to shareholders of the listed company for the first three quarters of 2024 will be a loss of 5.85 billion to 5.45 billion yuan, compared to a profit of 80.99 billion yuan in the same period last year.
- It is expected that the net profit attributable to shareholders of the listed company for the third quarter of 2024 will be a loss of 640 million to 320 million yuan, compared to a profit of 1.646 billion yuan in the same period last year.
- It is expected that the basic earnings per share for the first three quarters will be a loss of 3.57 yuan to 3.32 yuan, compared to a profit of 4.93 yuan in the same period last year; for the third quarter, the basic earnings per share is expected to be a loss of 0.39 yuan to 0.20 yuan, compared to 1.00 yuan in the same period last year.
The company announcement indicated that due to fluctuations in the lithium product market, from the fourth quarter of 2023 to the third quarter of 2024, the market prices of lithium products have shown a significant overall decline, leading to a substantial decrease in the company's lithium product sales prices and gross profit compared to the same period last year.
Due to the mismatch in the pricing mechanisms between the chemical-grade lithium concentrate pricing mechanism of the company's controlling subsidiary Talison Lithium Pty Ltd ("Talison") and the company's lithium chemical product sales pricing mechanism, the company's operating performance experienced a phase of losses during this reporting period.
In the first three quarters of 2024, the market price of chemical-grade lithium concentrate decreased, and the price of lithium concentrate newly purchased by the company from Talison also decreased accordingly. With the gradual entry of newly purchased low-priced lithium concentrate into inventory and the gradual digestion of inventory lithium concentrate, the cost of chemical-grade lithium concentrate consumed in the production costs of various bases of the company is gradually approaching the latest purchase price. The phase mismatch in the lithium concentrate pricing mechanism is gradually weakening, and the losses in the second and third quarters of 2024 have both decreased compared to the previous quarter.
At the same time, benefiting from the steady increase in production capacity of new factories, the sales volume of lithium compounds and derivatives in the first three quarters of 2024 and the third quarter of 2024 have achieved year-on-year and quarter-on-quarter growth