Proactive measures to re-phase growth
investments and optimize cost structure to generate
long-term financial flexibility and unlock >$750 million of cash flow over the
near term
CHARLOTTE, N.C., Jan. 17,
2024 /PRNewswire/ -- Albemarle Corporation (NYSE:
ALB), a global leader in providing essential elements for mobility,
energy, connectivity, and health, today outlined a series of
proactive measures underway to re-phase its organic growth
investments and optimize its cost structure in response to changing
end-market conditions, particularly in the lithium value chain.
These actions are designed to unlock cash flow over the near term
and generate long-term financial flexibility.
Albemarle expects its 2024
capital expenditures to be in the range of $1.6 billion to $1.8 billion, down from approximately
$2.1 billion in 2023. This new level
of spending reflects a re-phasing of larger projects in the near
term to focus on those that are significantly progressed, near
completion and in startup. Decisions made by the company include
to:
- Commission the Meishan lithium conversion facility, which
reached mechanical completion at the end of 2023;
- Complete commissioning activities for Trains 1 and 2 at
the Kemerton lithium conversion facility and focus
construction on Train 3;
- Prioritize permitting activities at the Kings
Mountain spodumene resource and defer spending at the Richburg
mega-flex lithium conversion facility;
- Defer investment for the Albemarle Technology Park in
North Carolina; and
- Limit sustaining capital spending to the most critical health,
safety, environmental, and site maintenance projects.
The company is also pursuing actions to optimize its cost
structure, reducing costs by approximately $95 million annually, primarily related to sales,
general, and administrative expenses, including a reduction in
headcount and lower spending on contracted services. Albemarle expects to realize more than
$50 million of these cost savings in
2024 and to pursue additional cash management actions primarily
related to working capital.
"The actions we are taking allow us to advance near-term growth
and preserve future opportunities as we navigate the dynamics of
our key end-markets," said Albemarle CEO, Kent Masters. "The long-term fundamentals for
our business are strong and we remain committed to operating in a
safe and sustainable manner. As a market leader, Albemarle has access to world-class resources
and industry-leading technology, along with a suite of organic
projects to capture growth."
Related to the actions announced today, Albemarle will record a charge in the first
quarter of 2024, primarily associated with severance and related
benefit costs, exit and disposal activities, and asset
write-downs.
The company will provide further details on its conference call
to announce full-year 2023 results at 9:00
a.m. EST on Thursday, February 15, 2024.
About Albemarle
Albemarle Corporation (NYSE: ALB) leads the world in transforming
essential resources into critical ingredients for mobility, energy,
connectivity, and health. We partner to pioneer new ways to move,
power, connect and protect with people and planet in mind. A
reliable and high-quality global supply of lithium and bromine
allow us to deliver advanced solutions for our customers. Learn
more about how the people of Albemarle are enabling a more resilient world
at albemarle.com and on X (formerly known as Twitter)
@AlbemarleCorp.
Albemarle regularly posts
information to www.albemarle.com, including notification of events,
news, financial performance, investor presentations and webcasts,
non-GAAP reconciliations, Securities and Exchange Commission
("SEC") filings and other information regarding the company, its
businesses and the markets it serves.
Forward-Looking Statements
This press release contains statements concerning our expectations,
anticipations and beliefs regarding the future, which constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements, which are based on assumptions that we have made as of
the date hereof and are subject to known and unknown risks and
uncertainties, often contain words such as "anticipate," "believe,"
"estimate," "expect," "guidance," "intend," "may," "outlook,"
"should," "would," and "will". Forward-looking statements may
include statements regarding expected: capital expenditure amounts;
the timing of the startup of the Meishan, China lithium conversion facility; plans and
expectations regarding other projects and activities, cost
reductions and accounting charges, and all other information
relating to matters that are not historical facts. Factors that
could cause Albemarle's actual
results to differ materially from the outlook expressed or implied
in any forward-looking statement include: changes in economic and
business conditions; financial and operating performance of
customers; timing and magnitude of customer orders; fluctuations in
lithium market prices; production volume shortfalls; increased
competition; changes in product demand; availability and cost of
raw materials and energy; technological change and development;
fluctuations in foreign currencies; changes in laws and government
regulation; regulatory actions, proceedings, claims or litigation;
cyber-security breaches, terrorist attacks, industrial accidents or
natural disasters; political unrest; changes in inflation or
interest rates; volatility in the debt and equity markets;
acquisition and divestiture transactions; timing and success of
projects; performance of Albemarle's partners in joint ventures and
other projects; changes in credit ratings; and the other factors
detailed from time to time in the reports Albemarle files with the SEC, including those
described under "Risk Factors" in Albemarle's most recent Annual Report on Form
10-K and any subsequently filed Quarterly Reports on Form 10-Q,
which are filed with the SEC and available on the investor section
of Albemarle's website
(investors.albemarle.com) and on the SEC's website at www.sec.gov.
These forward-looking statements speak only as of the date of this
press release. Albemarle assumes
no obligation to provide any revisions to any forward-looking
statements should circumstances change, except as otherwise
required by securities and other applicable laws.
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SOURCE Albemarle Corporation