S&P turns AMG Advanced view to positive

S&P said it revised its outlook for AMG Advanced Metallurgical Group NV to positive from stable and affirmed its ratings, including the BB- senior secured ratings.

“We anticipate the company will generate about $375 million to $425 million of EBITDA in 2023 and 2024 following the strong expansion it reported in 2022 (when it more than tripled its EBITDA to $370 million from $110 million in 2021). AMG's lithium business has grown materially over the last 12 months and is now the biggest source of its earnings. In 2022, AMG Brazil alone accounted for $200 million of the company's EBITDA because spodumene prices increased to $4,370 per metric ton (mt) from an average price of $640/mt between 2018 and 2021. As such, the main drivers of AMG's earnings and profitability have shifted toward its lithium mining operations and away from its metals processing business,” the agency said in a press release.

However, the change in focus to lithium and spodumene could mean more volatility in earnings because their prices can swing wildly, S&P warned.

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