China's Tianqi Lithium Corp, one of the world's top lithium producers, posted its first net profit in two years on Sunday as prices for the commodity used in electric-vehicle (EV) batteries rebounded strongly from a protracted slide.
Chengdu-based Tianqi said its net income was 85.8 million yuan ($13.3 million) for the first half of 2021, rebounding from a loss of 696.6 million yuan ($108 million) a year earlier.
That implies a second-quarter profit of 333.7 million yuan, after a 247.9 million yuan loss in January-March, marking Tianqi's best quarterly result since the fourth quarter of 2018.
The news marks a return to positive territory for Tianqi, which had posted seven straight quarterly losses from mid-2019 after a precipitous three-year plunge in lithium prices, driven by oversupply, left the company short of funds and facing default on billions of dollars in loans.
In December it secured a $1.4 billion lifeline investment in its Australian operations from IGO Ltd and has been boosted by a near tripling in lithium carbonate prices over the past 12 months as demand from the EV sector roars back.
First-half revenues were 2.35 billion yuan, Tianqi said in the filing, up 25.13 perent from a year earlier.
Tianqi and IGO this month produced the first batch of another battery chemical, lithium hydroxide, from the Kwinana plant in Western Australia, which had been put on hold early in 2020 as the coronavirus outbreak exacerbated the Chinese company's liquidity struggles.
The company said it expects the commissioning of more battery-making plants in the second half to further boost lithium demand, extending the price rally.