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Albemarle cuts FY'19 adjusted EBITDA forecast amid weaker lithium market

Albemarle Corp. said Oct. 24 that its full-year 2019 guidance for adjusted EBITDA was cut to between US$1.02 billion and US$1.06 billion, from the previous forecast of US$1.07 billion to US$1.14 billion, amid price pressure in a weak lithium market.

Adjusted earnings per share guidance was also trimmed to between US$6.00 and US$6.20, compared to the prior guidance of between US$6.25 and US$6.65. Meanwhile, net sales guidance was also revised downward to between US$3.6 billion and US$3.7 billion, from a range of US$3.65 billion and US$3.85 billion.

The Charlotte, N.C.-based producer expects attributable net income for the third quarter of US$155.1 million, or US$1.46 per share, based on preliminary results. This reflected an improvement against year-ago profit of US$129.7 million, or US$1.20 per share.

Revenue for the period is projected at US$330 million, up 22% yearly, with adjusted EBITDA improving 12% to US$128 million.

During the quarter, however, Albemarle was hit by weather-related impact at Shanghai in September that delayed lithium shipments to October, the use of tollers to meet customer commitments and solve operating issue at the La Negra operation in Chile, and price pressure on lithium sales in China. These issues resulted in EBITDA losses of about US$15 million, US$10 million and US$5 million, respectively.

Further, a US$7 million noncash charge was recognized for the period's result, after identifying an out-of-period adjustment in lithium carbonate inventory values.