Tianqi Lithium warns of 8.2 billion yuan loss in 2024

Tianqi Lithium (9696) warned of a loss of up to 8.2 billion yuan (HK$8.79 billion) for 2024, with the company expecting to recognize a total provision for asset impairment amounting to 2.16 billion yuan.

The company expects the net loss for last year to be somewhere between 7.1 and 8.2 billion yuan, a drastic turn from a profit of 7.3 billion yuan realized in 2023, according to a January 23 filing.

The loss was attributed to a “substantial” decline in its lithium product sales prices and gross profit amid market volatility, lower income from its associate, and asset impairments, the filing said.

Tianqi plans to cease investment and construction of its train II battery-grade lithium hydroxide monohydrate project, which is no longer considered “economically viable”.

The cumulative preliminary investment in the project reached 1.4 billion yuan as of last year. Its termination is expected to reduce the company's profit by 501 million yuan for 2024, a separate filing said.

The scrapped project, together with a provision for inventory impairment, impairment of construction in progress and right-of-use assets, and other factors, will lead to a total asset impairment of 2.16 billion yuan for last year, a filing on Friday showed.

STAFF REPORTER