Lithium mining giant Yabao raises its lithium sales forecast for 2021 and continues to increase investment in China.

(Albemarle), the world's largest lithium miner, released its third-quarter results on Wednesday, eastern time, showing that despite rising costs, the company's adjusted profit easily exceeded analysts' expectations. The company continues to be bullish on the lithium market and has raised its full-year lithium performance guidance.

The company's shares rose 2.5 per cent in after-hours trading after the results were announced.

The following are the highlights of Abel's third-quarter results (all percentage changes are year-on-year changes):

Net sales increased by 11% to US $830.6 million, while net sales excluding FCS increased by 19%.

Net loss of $392.8 million, or $3.36 per diluted share;

Adjusted earnings per share (EPS) was $1.05, a decrease of 4%, excluding the fee of $4.29 per share withdrawn as a result of the recent arbitration decision.

The adjusted EBITDA was 217.6 million US dollars, an increase of 1%; after deducting FCS, the adjusted EBITDA increased by 14%.

"despite the challenges facing the supply chain and increased raw material costs last quarter, we continued to achieve stable revenue and adjusted EBITDA growth," said Kent Masters (Kent Masters), chief executive of Albemarle.

In recent months, as global automakers have announced the transition to all-electric vehicles (EV), the demand for EV raw materials such as lithium and nickel has increased sharply.

Sales of lithium, the company's biggest business, rose 35% in the third quarter to $359.2 million, driven by rising prices. Masters predicts that "our customers' demand for electric vehicle battery metal will continue to increase."

Albemarle produced lithium carbonate for the first time last month at its lithium production site in La Negra III/IV, Chile. The company also said it was investing more in China to boost its business in the world's largest electric vehicle market.

Arbor recently announced plans to buy Chinese lithium producer Guangxi Tianyuan New Energy Materials Co., Ltd., for $200 million. Yabao said the acquisition of Tianyuan would expand its lithium production capacity and increase its lithium processing capacity in China near Qinzhou Port.

Yabo said Tianyuan's business, which includes a recently built lithium processing plant near the port, with a designed annual processing capacity of 25000 tons, is currently in trial operation and commercial production is expected to begin in the first half of 2022.

"We are investing to increase our huge processing capacity in China-with an initial goal of producing as much as 150000 tonnes of lithium hydroxide a year to meet the growing demand of our customers and high-return growth opportunities," Masters said on Wednesday. "

Improve annual performance guidelines

Based on strong third-quarter results, Albemarle improved its performance guidance for its lithium business in fiscal 2021.

The company expects the adjusted lithium business EBITDA to grow 15 per cent year-on-year for the whole of 2021, higher than the previous guidance. Sales growth for the whole of 2021 is expected to be about 15%.

Due to the tight market environment, the company expects the average pricing of lithium to rise gradually, and the price for the whole year will be the same or slightly higher than that in 2020. Due to the increase in project start-up and fee-related costs, the average profit margin of the lithium business is expected to remain below 35% for the whole of 2021, partially offset by productivity gains.

The company is scheduled to hold a conference call with investors on Thursday morning local time to discuss quarterly results.