Albemarle (ALB) Completes MARBL Joint Venture Restructuring
Albemarle Corporation ALB recently completed restructuring its MARBL joint venture with Mineral Resources Limited. This restructuring, announced earlier this year, has been closed after obtaining the necessary regulatory approvals.
As part of these revised agreements, the parties involved have worked to simplify their commercial arrangements. Consequently, Albemarle retains 100% ownership of the Kemerton lithium hydroxide processing facility in Australia. Furthermore, Albemarle maintains complete ownership of its Qinzhou and Meishan lithium processing facilities in China.
Notable points of the updated agreements include an economic effective date (EED) of Apr 1, 2022, and joint ownership of the Wodgina mine. Under this arrangement, Albemarle and Mineral Resources hold a 50% stake in the Wodgina mine, with Mineral Resources taking on the operator role.
Albemarle, which is among the prominent players in the chemical space along with Dow Inc. DOW, Eastman Chemical Company EMN and Celanese Corporation CE, is expected to make a payment to Mineral Resources in the range of $380-$400 million. This amount covers various components, including the net consideration for estimated EED settlement adjustments and the remaining 15% ownership interest in the Kemerton facility.
Albemarle, in the second-quarter earnings call, raised its net sales and adjusted EBITDA outlook for 2023, anticipating net sales of $10.4-$11.5 billion due to rising lithium market prices and expecting a 40-55% year-over-year growth driven by the global shift to electric vehicles. Adjusted EBITDA is forecasted at $3.8-$4.4 billion, and adjusted earnings per share are expected to be in the range of $25.00-$29.50, reflecting a more optimistic outlook than earlier projections.
Another prominent chemical maker, Dow, continues to pursue cost savings and long-term strategic goals in a challenging economic environment for the second half of 2023. The company is progressing toward $1 billion in cost savings, and its disciplined capital allocation supports its "Decarbonize and Grow" strategy. For the third quarter, Dow expects net sales to be around $10.25-$10.75 billion.
Eastman Chemical lowered its demand growth forecast, anticipating stability in specific end markets for the latter half of 2023. It expects a decrease in adjusted EPS for the second half compared to the first half and predicts full-year 2023 EPS to be within the range of $6.50 to $7.00. The company is also targeting $1.4 billion in operating cash flow for the year.
Celanese forecasts adjusted earnings of $2-$2.50 per share for the third quarter of 2023, with an estimated 30 cents impact from M&M amortization. For the full year, the company expects adjusted earnings to be in the range of $9 to $10, which incorporates roughly $1.20 per share of M&M transaction amortization.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Dow Inc. (DOW) : Free Stock Analysis Report
Albemarle Corporation (ALB) : Free Stock Analysis Report
Eastman Chemical Company (EMN) : Free Stock Analysis Report
Celanese Corporation (CE) : Free Stock Analysis Report
