Li-Cycle Reports Fourth Quarter and Year 2022 Financial and Operational Results; Continued Execution of the Spoke & Hub Network Strategy
Li-Cycle Holdings Corp. (LICY) announced its financial and operational results for Q4 and full year 2022. Revenues were $3.0 million for Q4 and $13.4 million for the year, down from $4.4 million and $7.3 million in 2021. Despite higher black mass production, net loss narrowed to $33.9 million from $204.9 million year-over-year. The company maintains strong cash reserves of $578.3 million and is progressing well with its Rochester Hub, expecting commissioning by late 2023. Li-Cycle also expanded its Spoke capacity significantly and developed new commercial partnerships with key players in the battery supply chain.
- Increased black mass production to 4,023 tonnes, surpassing 3,500-3,800 tonnes target range.
- Established multi-year commercial relationships with major clients in North America and Europe.
- Maintained strong cash position with $578.3 million as of October 31, 2022.
- Rochester Hub project remains on track for budget and commissioning in late 2023.
- Q4 revenues decreased to $3.0 million from $4.4 million in the same quarter of 2021.
- Operating expenses increased significantly to $39.4 million from $18.5 million in Q4 2021.
- Adjusted EBITDA loss widened to $32.6 million from $11.7 million in Q4 2021.
Fourth Quarter 2022 Highlights
- Advanced the Rochester Hub with key engineering, procurement, and construction milestones; continue to be on track for both project budget and schedule, to commence commissioning in late calendar 2023;
-
Operationalized the Alabama Spoke and ramping
Arizona andAlabama to target throughput; expanding capacity of the Germany Spoke; -
Black mass production of more than 1,600 tonnes, up more than
70% sequentially, and more than double versus the prior year1; -
Established new multi-year commercial relationships with key global customers in battery supply chain, recently including top tier global EV and battery OEMs to recycle battery materials in
North America andEurope ; launched a global recycling partnership with VinES, a leading Vietnamese battery manufacturer; -
cash on hand as of$578.3 million October 31, 2022 ; and - Progressed significantly towards meaningful debt financing; further details expected in calendar Q1 2023.
Full Year 2022 Highlights
-
Increased total Spoke installed capacity by nearly three times in
North America , withArizona and Alabama Spokes capable of processing full battery packs; doubled black mass production to 4,023 tonnes versus prior year and above the upper end of the revised black mass production target range of 3,500 to 3,800 tonnes; -
Launched strategically in
Europe with development of first Spoke inGermany , the largest market for battery manufacturing scrap and expected supply of end-of-life lithium-ion batteries ("LIB") in the region; -
Maintained project budget and schedule for the Rochester Hub, expected to be the first commercial hydrometallurgical battery resource recovery facility in
North America ; - Executed multi-year strategic commercial arrangements with global participants in the battery materials supply chain, LG Chem & LG Energy Solution ("LG") and Glencore; and
-
Strengthened balance sheet with combined
in investment proceeds from LG and Glencore.$250.0 million
“We are pleased by our strong fourth quarter operating performance as we brought on our third-generation
"I am incredibly proud of what our team has accomplished in 2022, building strong momentum for our Spoke & Hub business in 2023 and beyond," added Kochhar. "We continue to competitively position
Spoke & Hub Network
Rochester Hub Update
The Rochester Hub has made significant progress to date on key engineering, procurement, and construction milestones. Through
-
>
90% process equipment ordered; -
Achieved nearly
75% completion of the warehouse and associated administration center for storage of black mass and finished battery-grade materials; - Progressed construction of the cobalt, nickel and manganese process buildings;
-
~
65% of detailed engineering completed; and - Largely completed civil works, underground utilities and electrical infrastructure.
These achievements are expected to keep the project on track to initiate commissioning in late calendar 2023, and capital costs within the targeted budget (
Spoke Update
The development of
Additionally, the Company has continued to innovate its Spoke technology by incorporating operational project enhancements and processing upgrades. Since the build and installation of
In 2023, the Company expects to increase its total operational capacity to just over 80,000 tonnes LIB material input/year versus current capacity of just over 50,000 tonnes LIB material input/year (capacities including both main line and ancillary processing). As global demand continues to increase and customers shift regional demand sources,
Financial Results for the Period Ended
Fourth Quarter Review
Revenues from product sales and recycling services of
Operating expenses increased to
Net loss was approximately
Adjusted EBITDA2 loss was
Full-Year Review
Revenue from product sales and recycling services were
Operating expenses increased to
Net loss for the year was approximately
Adjusted EBITDA loss was approximately
Balance Sheet Position
At
The Company raised a total of
Change in Financial Reporting Period to Align with Calendar Year
On
Webcast and Conference Call Information
Company management will host a webcast and conference call on
Investors may listen to the conference call live via audio-only webcast or through the following dial-in numbers:
Domestic: (800) 579-2543
International: (203) 518-9783
Participant Code: LICYQ422
Webcast: https://investors.li-cycle.com
A replay of the conference call/webcast will also be made available on the Investor Relations section of the Company’s website at https://investors.li-cycle.com.
Filing of 2022 Audited Financial Statements
The Company’s auditors,
About
Non-IFRS Financial Measures
Adjusted EBITDA (loss)
The table below reconciles adjusted EBITDA (loss) to net profit (loss):
|
Three months ended |
Twelve months ended |
|||||||||||||||||
|
|
||||||||||||||||||
Unaudited - $ millions |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
||||
Net profit (loss) |
$ |
(33.9 |
) |
$ |
(204.9 |
) |
$ |
(53.7 |
) |
$ |
(226.6 |
) |
$ |
(9.4 |
) |
||||
Income Tax |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Depreciation |
|
3.3 |
|
|
1.1 |
|
|
10.1 |
|
|
2.9 |
|
|
1.1 |
|
||||
Interest expense |
|
7.6 |
|
|
2.1 |
|
|
17.4 |
|
|
3.0 |
|
|
0.5 |
|
||||
Interest income |
|
(4.4 |
) |
|
(0.1 |
) |
|
(7.0 |
) |
|
(0.1 |
) |
|
— |
|
||||
EBITDA (loss) |
|
(27.4 |
) |
|
(201.8 |
) |
|
(33.2 |
) |
|
(220.8 |
) |
|
(7.8 |
) |
||||
Fair value (gain) loss on financial instruments¹ |
|
(5.2 |
) |
|
35.8 |
|
|
(67.5 |
) |
|
38.3 |
|
|
0.1 |
|
||||
Excess of fair value over consideration transferred² |
|
— |
|
|
152.7 |
|
|
— |
|
|
152.7 |
|
|
— |
|
||||
Forfeited |
|
— |
|
|
— |
|
|
— |
|
|
2.0 |
|
|
— |
|
||||
Share-based compensation³ |
|
— |
|
|
1.6 |
|
|
— |
|
|
1.6 |
|
|
— |
|
||||
Adjusted EBITDA (loss) |
$ |
(32.6 |
) |
$ |
(11.7 |
) |
$ |
(100.7 |
) |
$ |
(26.2 |
) |
$ |
(7.7 |
) |
¹ Fair value gain on financial instruments relates to warrants, which were redeemed and no longer outstanding as of |
² Excess of fair value over consideration transferred relates to listing fees associated with the Business Combination. |
³ Share-based compensation relates to accelerated vesting of existing stock options upon completion of the Business Combination. |
Cautionary Notes - Forward-Looking Statements and Unaudited Results
Certain statements contained in this press release may be considered “forward-looking statements” within the meaning of the
These forward-looking statements are provided for the purpose of assisting readers in understanding certain key elements of Li-Cycle’s current objectives, goals, targets, strategic priorities, expectations and plans, and in obtaining a better understanding of Li-Cycle’s business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes and is not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability.
Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of
The Company’s auditors,
|
|
|
|||||
Consolidated statements of financial position |
|||||||
|
|
|
|||||
Unaudited - $ millions, as at |
|
2022 |
|
|
2021 |
|
|
|
|
|
|||||
Assets |
|
|
|||||
Current assets |
|
|
|||||
Cash and cash equivalents |
$ |
578.3 |
|
$ |
596.9 |
|
|
Accounts receivable |
|
1.5 |
|
|
4.1 |
|
|
Other receivables |
|
7.8 |
|
|
1.0 |
|
|
Prepayment and deposits |
|
85.8 |
|
|
8.5 |
|
|
Inventories |
|
7.5 |
|
|
1.3 |
|
|
|
|
680.9 |
|
|
611.8 |
|
|
|
|
|
|||||
Non-current assets |
|
|
|||||
Plant and equipment |
|
147.7 |
|
|
26.4 |
|
|
Right-of-use assets |
|
50.1 |
|
|
27.0 |
|
|
Other assets |
|
3.6 |
|
|
— |
|
|
|
|
201.4 |
|
|
53.4 |
|
|
Total assets |
$ |
882.3 |
|
$ |
665.2 |
|
|
|
|
|
|||||
Liabilities |
|
|
|||||
Current liabilities |
|
|
|||||
Accounts payable and accrued liabilities |
$ |
47.5 |
|
$ |
18.7 |
|
|
Lease liabilities |
|
5.2 |
|
|
2.9 |
|
|
|
|
52.7 |
|
|
21.6 |
|
|
Non-current liabilities |
|
|
|||||
Lease liabilities |
|
46.6 |
|
|
26.5 |
|
|
Convertible debt |
|
288.5 |
|
|
100.9 |
|
|
Warrants |
|
— |
|
|
82.1 |
|
|
Restoration provisions |
|
0.4 |
|
|
0.4 |
|
|
|
|
335.5 |
|
|
209.9 |
|
|
Total liabilities |
|
388.2 |
|
|
231.5 |
|
|
|
|
|
|||||
Equity |
|
|
|||||
Share capital |
|
771.8 |
|
|
672.1 |
|
|
Other reserves |
|
17.1 |
|
|
3.0 |
|
|
Accumulated deficit |
|
(294.7 |
) |
|
(241.1 |
) |
|
Accumulated other comprehensive loss |
|
(0.3 |
) |
|
(0.3 |
) |
|
Equity attributable to the Shareholders of |
|
493.9 |
|
|
433.7 |
|
|
Non-controlling interest |
|
0.2 |
|
|
— |
|
|
Total equity |
|
494.1 |
|
|
433.7 |
|
|
Total liabilities and equity |
$ |
882.3 |
|
$ |
665.2 |
|
The accompanying notes are an integral part of the condensed consolidated interim financial statements.
|
|||||||||||||||
Consolidated statements of loss and comprehensive loss |
|
||||||||||||||
|
|||||||||||||||
Unaudited |
Three months ended
|
Year ended |
|||||||||||||
$ millions except for per share amounts, for the years
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
||||||||||
Revenue |
|
|
|
|
|
||||||||||
Product sales |
$ |
2.6 |
|
$ |
4.2 |
|
$ |
12.1 |
|
$ |
6.9 |
|
$ |
0.6 |
|
Recycling services |
|
0.4 |
|
|
0.2 |
|
|
1.3 |
|
|
0.4 |
|
|
0.2 |
|
|
|
3.0 |
|
|
4.4 |
|
|
13.4 |
|
|
7.3 |
|
|
0.8 |
|
|
|
|
|
|
|
||||||||||
Expenses |
|
|
|
|
|
||||||||||
Employee salaries and benefits |
|
8.6 |
|
|
5.0 |
|
|
37.2 |
|
|
12.7 |
|
|
2.8 |
|
Share-based compensation |
|
3.8 |
|
|
2.7 |
|
|
17.5 |
|
|
4.0 |
|
|
0.3 |
|
Office, administrative and travel |
|
5.6 |
|
|
2.0 |
|
|
16.9 |
|
|
3.1 |
|
|
0.5 |
|
Professional fees |
|
5.9 |
|
|
3.5 |
|
|
16.5 |
|
|
7.7 |
|
|
3.0 |
|
Raw materials and supplies |
|
8.8 |
|
|
1.4 |
|
|
15.6 |
|
|
3.4 |
|
|
0.6 |
|
Depreciation |
|
3.3 |
|
|
1.1 |
|
|
10.1 |
|
|
2.9 |
|
|
1.1 |
|
Plant facilities |
|
1.2 |
|
|
0.3 |
|
|
3.7 |
|
|
1.0 |
|
|
0.4 |
|
Marketing |
|
0.5 |
|
|
0.5 |
|
|
2.4 |
|
|
1.0 |
|
|
0.4 |
|
Freight and shipping |
|
0.5 |
|
|
0.4 |
|
|
2.0 |
|
|
1.0 |
|
|
0.1 |
|
Research and development |
|
0.3 |
|
|
0.8 |
|
|
1.7 |
|
|
2.7 |
|
|
0.8 |
|
Change in finished goods inventory |
|
0.9 |
|
|
0.8 |
|
|
1.0 |
|
|
(0.3 |
) |
|
— |
|
Operating expenses |
|
39.4 |
|
|
18.5 |
|
|
124.6 |
|
|
39.2 |
|
|
10.0 |
|
|
|
|
|
|
|
||||||||||
Loss from operations |
|
(36.4 |
) |
|
(14.1 |
) |
|
(111.2 |
) |
|
(31.9 |
) |
|
(9.2 |
) |
|
|
|
|
|
|
||||||||||
Other income (expense) |
|
|
|
|
|
||||||||||
Interest income |
|
(4.4 |
) |
|
(0.1 |
) |
|
7.0 |
|
|
0.1 |
|
|
— |
|
Interest expense and other costs |
|
7.1 |
|
|
2.4 |
|
|
(17.0 |
) |
|
(3.8 |
) |
|
(0.1 |
) |
Gains (losses) on financial instruments |
|
(5.2 |
) |
|
35.8 |
|
|
67.5 |
|
|
(38.3 |
) |
|
(0.1 |
) |
Excess of fair value over consideration
|
|
— |
|
|
152.7 |
|
|
— |
|
|
(152.7 |
) |
|
— |
|
|
|
(2.5 |
) |
|
190.8 |
|
|
57.5 |
|
|
(194.7 |
) |
|
(0.2 |
) |
|
|
|
|
|
|
||||||||||
Net loss before taxes |
|
(33.9 |
) |
|
(204.9 |
) |
|
(53.7 |
) |
|
(226.6 |
) |
|
(9.4 |
) |
Income tax |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Net loss |
$ |
(33.9 |
) |
$ |
(204.9 |
) |
$ |
(53.7 |
) |
$ |
(226.6 |
) |
$ |
(9.4 |
) |
|
|
|
|
|
|
||||||||||
Net loss attributable to |
|
|
|
|
|
||||||||||
Shareholders of |
$ |
(33.9 |
) |
$ |
(204.9 |
) |
$ |
(53.6 |
) |
$ |
(226.6 |
) |
$ |
(9.4 |
) |
Non-controlling interest |
|
— |
|
|
— |
|
|
(0.1 |
) |
|
— |
|
|
— |
|
|
|
|
|
|
|
||||||||||
Other comprehensive loss |
|
|
|
|
|
||||||||||
Foreign currency translation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.2 |
) |
Net loss and comprehensive loss |
$ |
(33.9 |
) |
$ |
(204.9 |
) |
$ |
(53.7 |
) |
$ |
(226.6 |
) |
$ |
(9.6 |
) |
|
|
|
|
|
|
||||||||||
Loss per common share - basic and diluted |
$ |
(0.19 |
) |
$ |
(1.31 |
) |
$ |
(0.31 |
) |
$ |
(2.06 |
) |
$ |
(0.11 |
) |
|
|
|
|
||||||||
Consolidated statements of cash flows |
|
||||||||||
|
|
|
|
||||||||
Unaudited - $ millions, for the years ended |
|
2022 |
|
|
2021 |
|
|
2020 |
|
||
Operating activities |
|
|
|
||||||||
Net loss for the period |
$ |
(53.7 |
) |
$ |
(226.6 |
) |
$ |
(9.4 |
) |
||
Items not affecting cash: |
|
|
|
||||||||
Share-based compensation |
|
17.5 |
|
|
4.0 |
|
|
0.3 |
|
||
Excess of fair value over consideration transferred |
|
— |
|
|
152.7 |
|
|
— |
|
||
Depreciation |
|
10.1 |
|
|
2.9 |
|
|
1.1 |
|
||
Amortization of government grants |
|
— |
|
|
— |
|
|
(2.2 |
) |
||
Loss on disposal of assets |
|
(0.2 |
) |
|
— |
|
|
0.1 |
|
||
Foreign exchange (gain) loss on translation |
|
(1.4 |
) |
|
0.7 |
|
|
(0.3 |
) |
||
Fair value (gain) loss on financial instruments |
|
(67.5 |
) |
|
38.3 |
|
|
0.1 |
|
||
Share-based professional fees |
|
— |
|
|
— |
|
|
0.5 |
|
||
Interest expense |
|
17.4 |
|
|
3.0 |
|
|
0.5 |
|
||
Interest income |
|
(7.0 |
) |
|
(0.1 |
) |
|
— |
|
||
Interest paid |
|
(2.4 |
) |
|
(1.9 |
) |
|
(0.5 |
) |
||
Interest received |
|
5.4 |
|
|
0.1 |
|
|
— |
|
||
|
|
(81.8 |
) |
|
(26.9 |
) |
|
(9.8 |
) |
||
Changes in non-cash working capital items |
|
|
|
||||||||
Accounts receivable |
|
2.6 |
|
|
(3.5 |
) |
|
(0.5 |
) |
||
Other receivables |
|
(5.2 |
) |
|
(0.7 |
) |
|
0.4 |
|
||
Prepayments and deposits |
|
(3.6 |
) |
|
(4.8 |
) |
|
(0.6 |
) |
||
Inventories |
|
(6.2 |
) |
|
(1.0 |
) |
|
(0.1 |
) |
||
Accounts payable and accrued liabilities |
|
21.6 |
|
|
12.3 |
|
|
3.2 |
|
||
Cash used by operating activities |
|
(72.6 |
) |
|
(24.6 |
) |
|
(7.4 |
) |
||
|
|
|
|
||||||||
Investing activity |
|
|
|
||||||||
Purchases of plant and equipment |
|
(112.3 |
) |
|
(18.2 |
) |
|
(5.1 |
) |
||
Prepaid equipment deposits |
|
(76.4 |
) |
|
(3.2 |
) |
|
— |
|
||
Prepaid construction charges |
|
(1.4 |
) |
|
— |
|
|
— |
|
||
Cash used by investing activities |
|
(190.1 |
) |
|
(21.4 |
) |
|
(5.1 |
) |
||
|
|
|
|
||||||||
Financing activities |
|
|
|
||||||||
Proceeds from private share issuance, net of share issuance costs |
|
— |
|
|
21.6 |
|
|
6.5 |
|
||
Proceeds from public share issuance, net of share issuance costs |
|
49.7 |
|
|
525.3 |
|
|
— |
|
||
Proceeds from exercise of stock options |
|
— |
|
|
0.2 |
|
|
— |
|
||
Proceeds from exercise of warrants |
|
0.1 |
|
|
— |
|
|
— |
|
||
Proceeds from convertible debt |
|
198.7 |
|
|
98.4 |
|
|
— |
|
||
Proceeds from loan payable |
|
— |
|
|
10.1 |
|
|
2.1 |
|
||
Proceeds from government grants |
|
— |
|
|
— |
|
|
1.2 |
|
||
Capital contribution from the holders of non-controlling interest |
|
0.3 |
|
|
— |
|
|
— |
|
||
Repayment of lease principal |
|
(4.7 |
) |
|
(0.9 |
) |
|
(0.4 |
) |
||
Repayment of loan payable |
|
— |
|
|
(12.5 |
) |
|
— |
|
||
Cash provided by financing activities |
|
244.1 |
|
|
642.2 |
|
|
9.4 |
|
||
|
|
|
|
||||||||
Net change in cash and cash equivalents |
|
(18.6 |
) |
|
596.2 |
|
|
(3.1 |
) |
||
Cash and cash equivalents, beginning of year |
|
596.9 |
|
|
0.7 |
|
|
3.8 |
|
||
Cash and cash equivalents, end of year |
$ |
578.3 |
|
$ |
596.9 |
|
$ |
0.7 |
|
||
|
|
|
|
||||||||
Non-cash investing activities |
|
|
|
||||||||
Purchase of plant and equipment in payables and accruals |
$ |
7.2 |
|
$ |
2.1 |
|
$ |
— |
|
||
Non cash purchase of plant and equipment |
|
— |
|
|
2.1 |
|
|
— |
|
||
Non-cash financing activities |
|
|
|
||||||||
Equity issued for non-cash costs |
|
— |
|
|
— |
|
|
0.9 |
|
1 Includes Black Mass and Black Mass equivalents (BM&E) which are products analogous to Black Mass and have a similar metal content
2 Adjusted EBITDA is not a recognized measure under IFRS. See Non-IFRS Financial Measures section of this press release, including for a reconciliation of adjusted EBITDA to net profit (loss).
View source version on businesswire.com: https://www.businesswire.com/news/home/20230130005226/en/
Investors: investors@li-cycle.com
Media: media@li-cycle.com
Source:
FAQ
What are Li-Cycle's Q4 2022 financial results?
How much black mass did Li-Cycle produce in 2022?
When is the Rochester Hub expected to commence commissioning?
What is Li-Cycle's cash position as of October 31, 2022?