AMG Advanced Metallurgical Group N.V. Reports Third Quarter 2019 Results
Strategic Highlights
AMG commenced the construction of a new catalyst recycling facility in Ohio which will double our spent catalyst recycling capacity to 60,000 tons; to finance the expansion, AMG closed on a tax-exempt bond, generating proceeds of $325 million
AMG signed a multi-year offtake agreement with Glencore AG to reduce marketing risk and improve working capital management
AMG entered into a 50/50 joint venture for the global expansion of catalyst recycling services; upon obtaining the necessary regulatory approvals, the joint venture company, Shell & AMG Recycling B.V., will service the rapidly expanding spent resid catalyst market
AMG formed AMG Technologies to integrate its aerospace business units; as part of its growth strategy, AMG Technologies signed a definitive agreement to acquire the assets of International Specialty Alloys (located in New Castle, PA) from Kennametal Inc.
Financial Highlights
AMG completed its share repurchase program which returned $89.9 million to shareholders in 2019
Revenue decreased by 18% to $269.9 million in the third quarter 2019 from $328.1 million in the third quarter 2018
EBITDA(2) was $24.4 million in the third quarter 2019, a 59% decrease compared to the same period in 2018
Annualized return on capital employed was 16.1% in the third quarter 2019, as compared to 32.8% in the third quarter 2018
Amsterdam, 30 October 2019 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported third quarter 2019 revenue of $269.9 million, an 18% decrease from $328.1 million in the third quarter 2018. EBITDA for the third quarter 2019 was $24.4 million, a 59% decrease from $59.1 million in the third quarter 2018, largely due to lower ferrovanadium prices versus the third quarter of last year. EBIT decreased 73% to $13.9 million in the third quarter 2019 from $50.8 million in the third quarter 2018.
Revenue dropped 18% in the third quarter 2019, driven by a significant metal price decline across our portfolio. The 59% decrease in EBITDA to $24.4 million was largely due to the Critical Materials segment, which achieved an EBITDA of $8.8 million in the third quarter 2019. That drop is almost entirely explained by the decreased pricing of ferrovanadium, as well as lower chrome metal margin and lower silicon prices. AMG Technologies achieved an EBITDA of $15.6 million, a 15% decrease from the third quarter of 2018, due to lower profitability in the Titanium Alloys and Coatings business.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “The unprecedented fall in all critical materials prices across the AMG portfolio has been a major challenge. This negative trend appears to be bottoming out as higher cost producers are experiencing negative cash flows in the vanadium, tantalum, graphite, silicon metal and spodumene industries.
We continue to focus on the things we can control. We have made significant strategic achievements in the quarter, which included signing a long-term offtake agreement with Glencore, mitigating our sales exposure; securing a tax-exempt bond, generating proceeds of $325 million to build a second catalyst recycling facility in Ohio; signing a joint venture agreement with Shell Catalysts & Technologies for the global expansion of spent catalyst recycling services; and acquiring International Specialty Alloys, Inc., located in New Castle, PA, as a platform to produce several of our advanced metal alloy product lines in the United States.”