Australia's IGO swings to a loss on lithium downturn
Adds analysts' comments in paragraphs 4 and 8
By Sneha Kumar
Oct 28 (Reuters) -Australia's IGO IGO.AX posted a quarterly loss on Monday, swinging from a profit in the previous quarter as a slowdown in electric vehicle battery demand wiped out profits from its lithium operations.
For the period ended Sept. 30, the battery metal producer reported underlying EBITDA loss of A$2.9 million ($1.9 million), compared with a profit of A$76.8 million in the June quarter.
The bottom line was affected by a 45% drop in IGO's share of net profit from its 49% stake in lithium joint venture - Tianqi Lithium Energy Australia (TLEA), to A$37.1 million along with lower sales from the nickel business.
"Cashflows from TLEA were impacted by prevailing soft lithium market conditions, despite stronger-than-expected Greenbushes production as the operation worked through elevated site inventories," analysts at Jefferies said in a note.
Lithium, essential for the production of EV batteries, has suffered from slower-than-expected uptake of EVs and plentiful supply.
Hence, taking into consideration the market conditions, IGO did not declare any dividend from the joint venture.
The lower quarterly profit from TLEA primarily reflected lower spodumene sales and an average realised price of $872 FOB Australia per metric ton from Greenbushes, down from $1,020 per ton in the prior quarter, the company said.
Greenbushes spodumene production was 406,000 tons for the quarter, beating Jefferies' estimate by 11%.
($1 = 1.5135 Australian dollars)
Reporting by Sneha Kumar; Editing by Stephen Coates and Rashmi Aich
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