SMM News: may 6, Tianqi Lithium Industry (002466) in the exchange of interaction with investors revealed that this year Tellison Phase 2 new 600000 tons of lithium concentrate project is in smooth progress; After the first phase of the Australian base lithium hydroxide project reaches production this year, coupled with flood shooting and further tapping the potential of Zhangjiagang base, it is expected that the production capacity of lithium compounds will be close to 70,000 tons for the whole year, and the output will increase by more than 25% compared with the same period last year.
According to the plan, in 2019, the second chemical grade lithium concentrate plant (CGP2) at the Tyrison Green Bush spodumene mine controlled by Tianqi Lithium Industry will be completed, supplying stable raw materials to the company's plants at home and abroad. The existing production bases of Sichuan Shehong, Jiangsu Zhangjiagang and Chongqing Tongliang will continue to produce stably, and the first phase of the quinana battery lithium hydroxide base in Western Australia will gradually release its production capacity in 2019.
According to public information, Tianqi lithium industry achieved operating income of 6.24 billion yuan in 2018, an increase of 14.2 per cent over the same period last year. The net profit attributable to shareholders of listed companies was RMB 2.2 billion, an increase of 2.6 per cent over the same period last year. Of this total, sales of lithium mines totaled 2.2 billion yuan, up 24.2 percent from a year earlier, while sales of lithium compounds and their derivatives totaled 4.04 billion yuan, up 9.3 percent from a year earlier. Foreign sales revenue of RMB 1.06 billion yuan, to enhance the resistance to price fluctuations in the single market.
Under the market environment of lithium product price correction in 2018, the comprehensive gross profit margin of products reached 67.6%, re-establishing the leading position in the industry. The company's cash flow was strong in 2018, with net cash flow generated by operating activities of 3.62 billion yuan, an increase of 17.0 percent over 2017, resulting in a high quality profit.
In the first quarter of 2019, Tianqi lithium reported operating income of 1.337 billion yuan, down 19.89 per cent from a year earlier. The net profit attributable to shareholders of listed companies was RMB 111 million, down 83. 14 per cent from the same period last year. The decrease was mainly due to a significant increase in interest payments as a result of an increase in M & A loans compared with the same period last year, as well as a decline in the price of lithium products compared with the first quarter of 2018.
It is worth noting that on April 25, Tianqi Lithium Industry successfully sent three directors to the board of directors of SQM, and recently reached a consensus with PAMPA Group, another major shareholder of SQM, on corporate governance, working together to help SQM's long-term, healthy and efficient development. Let all shareholders get the maximum return on investment. On the same day, SQM's annual general meeting also approved a dividend policy for 2019, with SQM paying a dividend ratio of 100 per cent over the past three years.
Tianqi Li said that in 2019, the focus of the company's work is to reduce the asset-liability ratio to a more reasonable level through diversified financing channels to ensure financial soundness. On April 23, the company's annual general meeting approved that the company should allocate no more than 343 million shares to all shareholders at the proportion of no more than 3 shares for every 10 shares, and the total amount of fund-raising should not exceed 7 billion yuan.