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- \nLi-Cycle and Glencore to commence definitive feasibility study (DFS) to co-develop Portovesme Hub, expected to be largest resource recovery facility to produce key recycled critical battery materials in Europe;<\/p>\n<\/li>\n
- \nAdvanced the construction of Rochester Hub, maintaining budget and schedule to commence commissioning in late 2023;<\/p>\n<\/li>\n
- \nOptimized North American Spoke network for battery material feed with solid operating performance; Advanced development of three European Spokes, with Germany start-up on track for mid-2023;<\/p>\n<\/li>\n
- \nCompleted definitive agreement with VinES, the largest battery manufacturer in Vietnam;<\/p>\n<\/li>\n
- \nProgressed $375 million loan commitment from U.S. Department of Energy (DOE), with close on track for mid-2023; and<\/p>\n<\/li>\n
- \nCash on hand of $409.2 million as of March 31, 2023.<\/p>\n<\/li>\n<\/ul>\n
TORONTO–(BUSINESS WIRE<\/a>)–Li-Cycle Holdings Corp.<\/a><\/span> (NYSE: LICY) (\u201cLi-Cycle\u201d or the \u201cCompany\u201d), an industry leader in lithium-ion battery (LIB) resource recovery and the leading LIB recycler in North America, today announced financial and operating results for its first quarter ended March 31, 2023. Revenues from product sales and recycling services before fair market value adjustments were $7.7 million, which increased from $3.6 million in the same period of 2022. Total revenues were $3.6 million, compared with $8.0 million last year, and included an unfavorable non-cash fair market value metal pricing impact of $4.1 million, driven by a decline in cobalt and nickel prices, versus a benefit of $4.4 million in the prior year.<\/p>\n
\n\u201cAs we indicated at the end of March, we continue to deliver on our strategic objectives and further Li-Cycle\u2019s position as a leading pure-play resource recovery player in the battery supply chain. In North America, our operational Spokes continue to demonstrate strong production results to provide the future feed to our Rochester Hub, which remains on track to commence commissioning in late 2023,\u201d said Ajay Kochhar, Li-Cycle\u2019s President and Chief Executive Officer.<\/p>\n
\n\u201cConsistent with our strategy, we are extending the modular approach deployed in North America to Europe. With three Spokes in development, supported by numerous commercial contracts, we are excited to proceed with the next step in our strategy of \u2018closing the loop\u2019. Building on our strong partnership with Glencore, we plan to jointly study the feasibility of a European Hub that is expected to be the largest source of recycled battery-grade lithium, nickel, and cobalt in the continent. The development plan leverages Glencore\u2019s existing metallurgical site, at Portovesme, in Sardinia, Italy, to process up to 50,000 to 70,000 tonnes of black mass annually, or the equivalent of up to 600,000 electric vehicles.\u201d<\/p>\n
Commercial Arrangements<\/b><\/p>\n
\nOn April 12, 2023, Li-Cycle and VinES, the largest battery manufacturer in Vietnam, signed a definitive agreement for a long-term recycling relationship. From 2024, Li-Cycle will become the strategic and preferred recycling partner for Vietnamese-sourced battery materials of VinES. The agreement further contemplates the possible construction of a dedicated Spoke located close to the VinES manufacturing site in Vietnam. An investment decision regarding the dedicated Spoke facility is expected to be made in 2025. In the meantime, Li-Cycle will process VinES material utilizing Li-Cycle\u2019s North American Spoke network.<\/p>\n
Global Network Expansion Update<\/b><\/p>\n
\nWe continued to make great progress developing and operationalizing our network growth plans in both North America and Europe.<\/p>\n
\nThe Rochester Hub has continued to make significant strides on construction milestones, with procurement of long lead process equipment ahead of schedule and detailed engineering largely completed. The project remains on schedule for commissioning in late 2023 with construction costs within budget, trending at the higher end of the $486 million to $560 million range.<\/p>\n
\nOn May 9, 2023, Li-Cycle announced the Company has signed a Letter of Intent with Glencore, one of the world’s largest globally diversified natural resource companies, to jointly study the feasibility of, and later, to develop a new Hub facility in Portovesme, Italy. The Hub would produce critical battery materials, including nickel, cobalt, and lithium from recycled battery content. Li-Cycle and Glencore will jointly commence a DFS for this project in mid-2023, with expected completion by mid-2024. Subject to final investment decision by the parties, the project would proceed to construction, with commissioning expected to commence in late 2026 to early 2027. Once operational, the Portovesme Hub is expected to have an annual processing capacity of up to 50,000 to 70,000 tonnes of black mass, or the equivalent of up to 600,000 electric vehicles.<\/p>\n
Balance Sheet Position<\/b><\/p>\n
\nAt March 31, 2023, Li-Cycle had cash on hand of $409.2 million. During the quarter, the Company’s capital spend was $86.3 million, primarily driven by purchases of equipment and construction materials for the Rochester Hub.<\/p>\n
\nOn February 27, 2023, the Company entered into a conditional commitment with the DOE for a loan of up to $375 million through its Advanced Technology Vehicles Manufacturing Program, in support of the Rochester Hub development. This strategic financing achieves the Company’s goal of executing on debt financing that optimizes its capital structure and provides increased financial flexibility to fund future network growth plans. The Company is currently on track to close the transaction in mid-2023.<\/p>\n
Financial Results for the Three Months Ended March 31, 2023<\/b><\/p>\n
\nRevenues from product sales and recycling services before fair market value adjustments were $7.7 million, which increased from $3.6 million in the same period of 2022. The increase in product revenue was primarily attributable to the higher sales volume from the continued growth of the Company\u2019s customer base, the expanding operations of the Company\u2019s Spoke facilities, and the benefit of a higher sales value mix, partially offset by a reduction in market prices of cobalt and nickel. Total revenues were $3.6 million, compared with $8.0 million last year, and included an unfavorable non-cash fair market value metal pricing impact of $4.1 million versus a benefit of $4.4 million, respectively, driven by the decline in cobalt and nickel prices.<\/p>\n
\nOperating expenses increased to $42.7 million versus $29.1 million in the same period of 2022, driven primarily by higher raw material and supply costs due to increased volume of production coupled with higher average material costs. In addition, other expenses were higher due to the expansion of the Company’s global Spoke network and the construction of the Rochester Hub.<\/p>\n
\nNet loss was $39.4 million, compared to $10.1 million in the same period of 2022, and included a fair value loss on financial instruments of $0.7 million and a gain of $14.9 million, respectively.<\/p>\n
\nAdjusted EBITDA1<\/sup> loss was $35.2 million, compared to a loss of $19.5 million in the same period of 2022, attributed to higher expenses in support of the Company\u2019s expansion of the global Spoke network and the construction of the Rochester Hub. Additionally, non-cash share-based compensation decreased to $3.2 million from $7.0 million in the same period of 2022.<\/p>\n
Webcast and Conference Call Information<\/b><\/p>\n
\nCompany management will host a webcast and conference call on Monday, May 15, 2023, at 8:30 a.m. Eastern Time. The related presentation materials for the webcast and conference call will be made available on the investor section of the Li-Cycle website: https:\/\/investors.li-cycle.com\/overview\/default.aspx<\/a>. Investors may listen to the conference call live via audio-only webcast or through the following dial-in numbers:<\/p>\n
\nDomestic: (800) 579-2543
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International: (203) 518-9783
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Participant Code: LICYQ123
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Webcast: https:\/\/investors.li-cycle.com<\/a><\/p>\n\nA replay of the conference call\/webcast will also be made available on the Investor Relations section of the Company\u2019s website at https:\/\/investors.li-cycle.com<\/a><\/span>.<\/p>\n
About Li-Cycle Holdings Corp.<\/b><\/p>\n
\nLi-Cycle (NYSE: LICY) is on a mission to leverage its innovative Spoke & Hub Technologies\u2122 to provide a customer-centric, end-of-life solution for lithium-ion batteries, while creating a secondary supply of critical battery-grade materials. Lithium-ion rechargeable batteries are increasingly powering our world in automotive, energy storage, consumer electronics, and other industrial and household applications. The world needs improved technology and supply chain innovations to better manage battery manufacturing waste and end-of-life batteries, and to meet the rapidly growing demand for critical and scarce battery-grade raw materials through a closed-loop solution. For more information, visit https:\/\/li-cycle.com\/<\/a>.<\/p>\n
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