© Reuters.
CHARLOTTE, N.C. – Albemarle Corporation (NYSE: NYSE:), a key player in the production of essential elements for various industries, has announced a strategic reduction in its capital expenditures for 2024, aiming to enhance cash flow and financial flexibility amidst shifting market conditions, especially in the lithium sector. The company has planned to decrease its capital spending to between $1.6B and $1.8B, a significant drop from the $2.1B spent in 2023.
The revised spending plan focuses on advancing nearly completed projects and prioritizes the commissioning of the Meishan lithium conversion facility, which achieved mechanical completion at the end of 2023. Albemarle will also complete commissioning activities for Trains 1 and 2 at the Kemerton lithium conversion facility and continue construction on Train 3. However, the company has decided to defer investments in the Albemarle Technology Park in North Carolina and limit sustaining capital expenditure to essential projects related to health, safety, environmental, and site maintenance.
In addition to capital expenditure adjustments, Albemarle is undertaking cost optimization initiatives aimed at saving approximately $95M annually, mainly through reductions in sales, general, and administrative expenses. This includes headcount reductions and decreased spending on contracted services. The company anticipates realizing over $50M of these savings in 2024 and will pursue further cash management actions, primarily related to working capital.
Kent Masters, Albemarle’s CEO, stated that these actions support the company’s near-term growth while preserving future opportunities as they navigate the dynamics of their key end-markets. He emphasized the robust long-term fundamentals of their business and their commitment to safety and sustainability.
The company will also record a charge in the first quarter of 2024, mainly associated with severance and related benefit costs, exit and disposal activities, and asset write-downs. Detailed information on these actions will be provided in Albemarle’s conference call to announce full-year 2023 results on February 15, 2024.
This article is based on a press release statement from Albemarle Corporation.
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This story originally appeared on Investing
