Allkem books record result post merger but labour crunch, COVID absenteeism to set cut output

Allkem has posted record financial results on the back of surging lithium prices and the merger of Orocobre and Galaxy Resources last year that created it.

Allkem reported an annual profit of $US305.7 million, up from a loss of $US59.6m the previous year.

The result was achieved on the back of an 800 per cent jump in revenue to $US770m.

But the company has been forced to cut production guidance from its Mt Cattlin mine near Ravensthorpe because ongoing labour shortages, exacerbated by high staff turnover and COVID absenteeism, had delayed pre-stripping activities at its main ore source.

As a result, full-year spodumene concentrate production was expected to fall to 140,000-150,000 tonnes from the 160,000-170,000t flagged previously.

Allkem managing director Martin Perez de Solay said it had been a transformational year with the merger of Orocobre and Galaxy providing shareholders with exposure to strongly profitable existing operations and an enviable suite of development assets.

“We achieved record revenue for the group, not only from strengthened pricing but from successfully and safely producing high-quality lithium products from our global operations that have managed costs, improved safety performance and delivered record production during a period of supply chain disruption, labour shortage, high inflation and ongoing COVID-19 impacts,” he said.

“Amidst surging demand for lithium products our team also achieved significant advancements at all our development assets across the globe with both Olaroz Stage 2 and Naraha on the cusp of commissioning this calendar year.”

Allkem shares closed down 13¢ at $13.75.