0001171843-25-001837
SEC filingSigma Lithium's 2024 revenue grew 15% to $208.7M, but gross margin collapsed to 21% from 49%, and net loss more than doubled to $70M due to lower realized lithium prices, foreign exchange losses, and a contractual penalty.
Sigma Lithium’s fiscal 2024 results were shaped by a sharp disconnect between volume growth and price realization. Revenue rose 15.2% to $208.7 million, as sales volume nearly doubled from 135.0 kt to 236.8 kt, but the benefit was largely erased by a 64.2% drop in average realized prices. The company recorded $64.2 million in negative provisional price adjustments, reflecting the steep decline in lithium concentrate prices during the year.
Gross profit fell 50.2% to $44.3 million, compressing gross margin from 49.1% to 21.2%. The cost of goods sold increased 78.1% to $164.5 million, outpacing revenue growth, due to higher mining and processing costs associated with ramping up the Phase 1 greentech plant and a full year of operations versus only six months in 2023.
Operating loss before financial items improved to $6.2 million from $21.6 million in 2023, as selling, general and administrative expenses were cut by over half to $25.2 million, reflecting cost reduction measures. However, net loss widened to $70.0 million from $38.2 million, driven by $84.2 million in net financial expenses—mostly foreign exchange losses ($45.3 million) and interest on debt ($28.8 million), plus a $7.0 million contractual penalty for non-compliance with loan covenants.
Diluted loss per share was $0.63 versus $0.35 in the prior year.
Total assets declined 3.4% to $470.6 million, primarily due to a $36.9 million reduction in property, plant, and equipment from currency translation and depreciation. Cash and cash equivalents were relatively flat at $66.1 million, while trade receivables fell to $16.7 million as shipments were collected.
Total debt (loans and export prepayments) surged 46.1% to $249.7 million, comprising $143.9 million in the long-term Synergy facility and $86.5 million in short-term trade finance lines. The company raised $242.6 million in new loans during 2024 and repaid $166.5 million. Net debt to equity (gross debt/shareholders’ equity) increased to 1.88x from 0.80x, reflecting both higher borrowing and a $81.5 million decline in equity (driven by accumulated losses and foreign currency translation).
Shareholders’ equity fell to $132.8 million from $214.3 million. The company holds $18.2 million in cash collateral against the Synergy loan. Deferred tax assets increased to $27.7 million, primarily from net operating loss and temporary differences.
Operating cash flow was a use of $24.3 million, compared to a use of $30.8 million in 2023. The improvement was driven by lower interest payments ($43.6 million vs $0.5 million in 2023) and a decrease in trade accounts receivable, partially offset by a larger net loss. Capital expenditures totaled $32.6 million (including $4.2 million in deferred exploration), down from $82.2 million in 2023, reflecting the completion of Phase 1 construction. Free cash flow (operating cash flow less capex) was negative $47.4 million.
Financing activities provided $72.1 million, mainly from new debt. The company did not repurchase shares or pay dividends. Capital allocation is heavily focused on the Phase 2 expansion, funded by the BNDES development loan of BRL 486.8 million (not yet drawn as of year-end) and existing debt facilities.
Management highlighted the successful first full year of commercial production, with 240,800 tonnes of lithium concentrate produced and the Phase 1 greentech plant operating at above-nameplate capacity. Key operational milestones include the Final Investment Decision for Phase 2, which is expected to double total capacity to 520,000 tonnes per annum by end of 2025. The company secured a BNDES development loan to fund Phase 2 construction, with commissioning of the crushing circuit targeted for late Q2 2025.
The MD&A notes that adjusted EBITDA (a non-GAAP measure) was $24.0 million for 2024, down from $38.9 million in 2023, reflecting the margin compression. Management expects continued focus on cost reduction, plant optimization, and advancing Phase 2 and 3 projects.
Material weaknesses in internal control over financial reporting were identified and are being remediated, with a target to resolve by end of fiscal 2025.
Sigma operates a single reportable segment: lithium concentrate production. All revenue is derived from exports, primarily to China. The company’s customer base is concentrated, with IRH Global Trading acting as the main offtake partner.
Stock-based compensation expense was $11.2 million, down from $47.0 million in 2023, mainly due to fewer new grants. The company recognised a $7.0 million contractual penalty for covenant breaches and a $6.5 million accrual for legal contingencies, both treated as non-recurring items.
Mineral resources and reserves were updated, with total measured and indicated mineral resources of 93.2 Mt at 1.40% Li2O and proven and probable reserves of 76.4 Mt at 1.29% Li2O. The updated technical report supports a 23-year mine life across all phases.
The SUDENE tax incentive was approved, providing a 75% reduction in income tax for 10 years, which contributed $3.4 million to a tax incentive reserve in equity.