Earnings call transcript: AMG’s Q2 2025 results highlight strong EBITDA

AMG Advanced Metallurgical Group NV, a $6 billion market cap company, reported its Q2 2025 earnings, showcasing strong financial performance with the highest quarterly adjusted EBITDA since Q4 2023. Despite an equipment failure affecting lithium production, the company managed to maintain robust liquidity and a diversified business approach. The stock saw a slight decline of 0.24% in after-hours trading, reflecting mixed investor sentiment following the earnings release. According to InvestingPro analysis, AMG is currently undervalued, presenting a potential opportunity for investors.

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Key Takeaways

• AMG reported a quarterly adjusted EBITDA of $129 million, the highest since Q4 2023.
• Net debt stands at $502 million, with total liquidity of $462 million.
• Lithium production affected by equipment failure, currently at 110,000 tons annualized.
• Antimony sales prices increased significantly, contributing positively to earnings.
• The company maintains a strong presence in strategic materials with a multiregional approach.

Company Performance

AMG’s performance in Q2 2025 demonstrated resilience despite challenges in its lithium production segment. The company’s diversified platform across upstream, midstream, and refining sectors provided structural advantages, allowing it to remain profitable even with low lithium and vanadium prices. AMG’s focus on expanding its vanadium presence in the Middle East and successful bidding for spent catalysts further solidified its competitive position.

Financial Highlights

• Revenue: $439 million
• Adjusted EBITDA: $129 million, highest since Q4 2023
• Net debt: $502 million
• Unrestricted cash: $262 million
• Return on Capital Employed: 14.9%
• Tax expense: $7 million, down from $11 million in Q2 2024

Earnings vs. Forecast

AMG reported an earnings per share (EPS) of $0.34 for Q2 2025. While specific forecast figures were not provided, the results highlight AMG’s ability to manage operational challenges and maintain profitability. The adjusted EBITDA increase to $129 million reflects a positive deviation from previous expectations.

Market Reaction

Following the earnings release, AMG’s stock experienced a modest decline of 0.24% in after-hours trading. Despite this short-term movement, the stock has demonstrated strong momentum with a 12% gain over the past six months. The stock’s current price of $210.53 reflects mixed sentiment, likely influenced by the ongoing equipment issues in lithium production and the overall market’s cautious outlook on commodity prices. Trading near its 52-week high of $216.32, the stock shows resilience amidst sector volatility.

Outlook & Guidance

AMG has revised its adjusted EBITDA outlook upwards, anticipating higher contributions from its antimony segment. The company expects to reach free cash flow breakeven for the full year 2025. Ongoing strategic initiatives, such as expanding vanadium operations and increasing inventory of spent catalysts, position AMG for future growth. InvestingPro data shows a "GOOD" Financial Health Score of 2.94, with analysts maintaining a bullish consensus on the stock. The company’s strong financial position is further supported by expectations of profitable operations this year.

Executive Commentary

Heinz Schimmelbusch, CEO, emphasized the company’s structural advantages, stating, "Our diversified platform provides a distinct structural advantage." Jackson Dunkle, CFO, highlighted the financial strategy, noting, "We do have the chance to get free cash flow breakeven for the full year."

Risks and Challenges

• Equipment failure in lithium production could impact future output and revenue.
• Continued low prices for lithium and vanadium may pressure margins.
• Global economic conditions and commodity price volatility pose ongoing risks.
• Supply chain disruptions could affect material availability.
• Regulatory changes in strategic markets could impact operations.

Q&A

During the earnings call, analysts inquired about the timeline for resolving the equipment issue in lithium production, expected to reach 55,000 tons in the second half of 2025. Discussions also focused on AMG’s strategic conversations with US and EU governments regarding support for critical materials, highlighting the company’s alignment with national strategic goals.

Full transcript - AMG Advanced Metallurgical Group NV (AMG) Q2 2025:

Conference Operator: Good day, everyone, and welcome to today’s AMG Q2 twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. Later, you will have an opportunity to ask questions during the question and answer session. Please note this call is being recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Thomas Swoboda.

Please go ahead, sir. Yes. Good morning, everyone, and welcome to ING’s second quarter two thousand and twenty five earnings call. Joining me on this call is doctor Heinz Schimmelbusch, the chairman of the board and chief exec officer, mister Jackson Dunkle, the chief financial officer, and mister Michael Conner, the chief corporate development officer. AMG’s second quarter earnings press release issued yesterday is on AMG’s website.

Today’s call will begin with a review of the second quarter two thousand twenty five business highlights by doctor Shimabuk. Mister Connor will comment on strategy, and mister Danko will comment on AMG’s financial results. At the completion of mister Dunkle’s remarks, doctor Schimmelbusch will comment on outlook. We will then open the line to take your questions. Before I pass the call to doctor Schimmelbusch, I would like to express the review to our statements on forward looking statements and the meaning thereof, as we have used at all previous occasions and we use at this earnings call, and which explanatory statements have been published as part of our financial presentation and on our website or in connection with this earnings call.

I will now pass the floor to doctor Schimmelbusch, AMG’s Chairman of the Management Board and Chief Executive Officer. Doctor. Schimmelbusch? Thank you, Thomas. I’m pleased to report our highest quarterly adjusted EBITDA since Q4 ’twenty three.

And the high profitability from AMG Engineering, bolstering AMG’s technologies to start compared to last year. We are not experiencing any negative effects to date on the tariff situation and the analysis of our fourth quarter growth growth that we carry on, that we expect that this will continue. And the including refining accelerate efforts to secure access to strategic raw material. Our diversified platform provides a distinct structural advantage. We operate across upstream, midstream and refining, are able to offer localized, reliable solutions tailored to the demand of safe geopolitical and regulatory environment.

This multiregional, multimaterial footprint the This initiative reflects AMG’s global execution capability and its alignment to strategic national goals. Project is a powerful example of how we integrate technical expertise, local industrial policies for long term economic diversification and resource transformation. I will now pass the floor to Jack Noble, AMG’s Chief Financial Officer. Jack? Thank you, Mike.

I’ll be referring to the second quarter twenty twenty five investor presentation posted yesterday on the website. Starting on page five of the presentation, I’d like to emphasize Heinz’s comments about the strength of AMG’s portfolio. AMG delivered the highest quarterly EBITDA since the 2023 despite the continued low lithium and vanadium prices. On page six, you can see the price and volume movement for our key products represented by arrows, which underscore our segmental results. As you’ll hear in our divisional results, despite the number of volume arrows pointing down, we are, by and large, not experiencing a drop in demand across our business units.

AMG Lithium results are shown on page eight. On the top left, you can see that q two twenty five revenues decreased 3% versus the prior year. This variance was driven mainly by both a decline in lithium prices as well as a decrease in lithium concentrate volumes, partially offset by tantalum sales price increases. In Brazil, we are currently running at an annualized production rate of a 110,000 tons due to the failure of one piece of equipment associated with our expansion project. As noted in yesterday’s release, we are addressing this issue.

Despite the decrease in lithium market prices and depressed volumes, we remain profitable. Adjusted EBITDA for the segment in q two twenty five increased 66% compared with the second quarter of last year, primarily due to the low cost per ton in the current quarter. Same to you for the medium results are shown on page nine. Revenue for the quarter decreased by 4% compared to q two twenty four due mainly to lower volumes of ferrovanadium and titanium alloys. The ferrovanadium decline was driven by production issues from our refinery suppliers, and the titanium alloy decline was due to downstream aerospace production issues.

The lower volumes were partially offset by increased sales prices in ferrovanadium and chrome metal. Q two twenty five adjusted EBITDA of $15,000,000 for ferrovanadium division was 23% below q two of last year. This decrease was primarily due to lower sales volume. While EBITDA decreased compared to q two twenty four, AMG Vanadium does continue to benefit from section 45 x production credits. Energy vanadium is increasing its presence in Saudi Arabia and The Middle East.

And in the context of this effort, we are successful in bidding for significant quantities of spent catalyst in the region. Although this increase in working capital had a significant negative effect on our operating cash flow in the current quarter, this incremental inventory will help AMG vanadium reduce the volatility of spent catalyst supply deliveries. The results for ANGI Technologies are shown on page 10. The q two twenty five revenue increased by $83,000,000 or 53% versus q two twenty four. This improvement was driven by higher antimony sales prices in the current period.

Adjusted EBITDA of $53,000,000 during q two was almost triple the same period last year. This increase was also due to higher profitability in AMG Antimony. Page 11 of the presentation shows our main income statement items. The key change on this page is regarding our tax expense, which is 7,000,000 in the current quarter compared to 11,000,000 during q two twenty four. The q two twenty five expense was primarily driven by strong profitability in the quarter as well as tax expense from unabsorbed losses, but these were partly offset by Brazilian deferred tax benefit related to depreciation of the Brazilian real.

Page 12 of the presentation shows our cash flow metrics. The key item on the page is our q two twenty five return on capital employed of 14.9% in the current period, which was higher than in any quarter since q four twenty three. AMG ended the quarter with $502,000,000 of net debt. And as of June 30, we had $260,000,000 $262,000,000 in unrestricted cash and 200,000,000 available on our revolving credit facility. The resulting $462,000,000 of total liquidity at the end of the quarter demonstrates our ability to fully fund all approved capital expenditure projects.

We continue to expect capital expenditures to be in the 75,000,000 to $100,000,000 range for 2025. That concludes my remarks. Doctor. Toobouch? Thank you, Jackson.

An adjusted EBITDA of $129,000,000 represents a very strong Based on that and considering uncertain economic and market conditions globally, we increased our adjusted EBITDA outlook from 107,000,000 or more in 2025 And And our first question comes from Martin Denderer from ABN AMRO. Please go ahead, Martin. Yes. Thank you, operator, and good morning, gentlemen. I have three questions, please, and I’ll take them one by one.

My first question is with regards to the operational issue in AMG Lithium and faulty part, if you will, in the expansion program. Can can you help us understand when you think you will have solved that issue? So when we can go back to the 130,000 metric tons? Yeah. So it is a a discrete equipment issue.

So a single piece of equipment, which we are in the process of fixing, and we do believe is eminently fixable. As to when we’re gonna be able to deliver that, you know, you will see we will report that as soon as it happens. We are producing presently a 110,000 tons annualized. That is in between the 90,000 tons of the previous capacity Great. Thank you.

So I shouldn’t assume anything more than one quarter of the required time to get back to normal. Is that the right way to think about it? We are if we had a time frame, we would give it to you, and we’re not giving it to you. So I’m afraid that’s a little aggressive. No.

I mean, it is well, okay. The people that have recent issues are being sold. It’s a little bit detailed here. Yeah. In a running plan.

Yeah. We we just simply. Okay. I’ll I’ll move on. My second question is is with regards to vanadium.

Now that you have purchased inventory from The Middle East, Do you think you are able to get to a stable vanadium content? And in relation to that, given that new supply situation, would you be able to get to to help us in understanding what the new EBITDA profitability level would be for Cambridge one and two given this change in the supply situation? Well, our our role of but something which will be leasing our. We are also entering phase of additional and better this capacity in our so called phase two of the supercenter project in And, well, the line is is quite bad. So I’m I’m not sure that I caught everything, but I’ll take that offline.

And my third question is on antimony. It’s very helpful that you have quantified the the one off effect of selling the low price antimony. But can you help us understand if we assume a steady price at this level, what the new normal EBITDA contribution would be for antimony given the higher price level. It used to be a 10,000,000 EBITDA unit roughly speaking. What would be the new contribution assuming steady prices?

Well, as you obviously will understand, this is a market which is I I would say that we’re saying that we’re gonna be higher than the additional earnings that. Any way that you can help us quantify that a bit? Is it is it is it double? Is it triple? You can have to get higher.

I understand that it doesn’t help much, I mean, I’m sorry to say. I understand. Those were my questions. Thank you very much. And our next question comes from Michael Keune from Deutsche Bank.

Please go ahead, Michael. Good morning, gentlemen. Happy to join this call for the first time. Few questions from my side. I would start with the free cash flow, which was, let’s say, strongly supported from a profit perspective but burdened by outflows through the working capital.

Can we maybe expect a, let’s say, normalization or improving situation on the working capital side in h two? And is there still a chance for you to reach free cash flow breakeven for f y twenty five? The answer is in terms of normalization, I’m sensitive to saying that our quarterly operating cash flows and free cash flows won’t continue to be volatile given the number of outflows and inflows that we experienced. That being said, we have significantly higher cash flow in the second half, and we do have, you know, the chance to get free cash flow breakeven for the full year. Excellent.

Thank you for that. Then on your chrome plans in The US, maybe a quick update on how you’re progressing. And in that context, do you see, let’s say, sufficient demand, or would there be any risk of of, let’s say, cannibalization versus your existing capacities? So our home rental plant project in Pennsylvania in the neighborhood of Pittsburgh is on plan. It’s executed as expected.

We therefore, I expect that the the impact deposit in ’26. Okay. Thank you for that. Sold out. Sounds good.

On the The US, one more question. Obviously, we’re seeing very significant efforts by the US government to improve independence in the area of critical materials. And you’re obviously in in player in that area. Beyond Chrome, is there any discussions going on with the US government in terms of further investments or, let’s say, how your company could help achieving a better level of independence in the area of critical materials? We this is about thirty years.

I mean, that’s my price or so. Alright. And given the quick answer, I would ask one last question on Bitasode, which you’ve commissioned in the in the second quarter. As it’s in, let’s say, recent discussions with potential clients or with clients where you have signed contracts already? And what would you expect from today’s perspective in terms of the ramp, the capacity utilization, and when you might be able to achieve, let’s say, utilization that would make this plan breakeven?

The design capacity is covered by a contract. In order to reach the design capacity, there is a random schedule that we are on schedule. That’s what’s happening, and we are all back. Excellent. Thank you for that.

Once again, if you would like to ask a question, please press star and one on your phone now. And we do have a question from Martin Verbique from The Idea. Please go ahead, Martin. Good morning, gentlemen. It’s Martin Baker.

Do have a couple of questions from my side, please. Firstly, due to this this single piece of equipment which you filled, you have now a nameplate capacity of a 110. However, that should suggest more or less 27 and a half k per quarter. However, the volume at this stage is still a 50% of that level. I do believe that the first quarter you mentioned that you did some maintenance, But how should we see this in the upcoming quarters?

What kind of volume do you expect to ship? We prefer to answer in terms of the second half, and you should see in the second half, we will be at a 110,000 tons of capacity, I e 55,000 tons in the second half. That being said, it will likely be backwards weighted to the fourth quarter. Okay. Thank you.

Secondly, you gave an explanation for the increase in the inventories, which went up by some 50,000,000. Is that purely due to the spent capital capitalist bidding, or it’s also partly due to lithium industry? No. It’s partly due to vanadium as well as antimony because as we continue to buy inventory at higher prices, it has increased our inventory value. So the bidding of these spent catalyst has did not have an impact on your working capital?

No. It did. But what I’m saying is it’s both vanadium as well as antimony. Okay. Sorry.

I misunderstood you. And what’s the what’s what will you will you be continue bidding for spent capitalist in quarters ahead? Well, we will decide that but as the bidding come up, but definitely, we expect that the the capital associated with the successful bidding will work down over time. Yeah. Okay.

And to get back to a previous question with a very modest answer from you with respect to the cooperation with The US bodies on critical materials. Could you elaborate a bit more on these talks? So I think it’s important to highlight that we have ongoing conversations in all the areas we operate. As you can see, US industrial policy as well as the EU critical, this year, go back And that’s not new, but obviously, there has been an increased focus in both government interest as far as supporting regulations across the globe. So I don’t think we want to get into any specific conversations, but we’ll say that, you know, obviously, across our our portfolio and across our geography, we’re seeing a lot of interest in in support for our existing operations as well as potential expansion opportunities.

Okay. Thank you. And lastly, your OpEx was also hit by a one off executive retirement benefit expense, 3,300,000.0, which is, in my view, quite a lot. Could you give some color to that as well? Yeah.

That’s related to retirements in our US offices. Okay. Thank you very much. And at this time, there are no further questions. I’ll turn the call back over to Thomas to close out the call.

Yes. Thank you very much for the interest in AMG. We will see you on the road, and that concludes our call today. Thank you so much. This does conclude today’s AMG Q2 twenty twenty five earnings conference call.

Thank you for your participation. You may now disconnect. The host has ended this call. Goodbye.

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