Li-Cycle's revenue fell by 30% in the fourth quarter, and its recycling capacity will reach 80,000 tons by the end of the year

The company recycles lithium-ion battery packs from a variety of industries. Image: Li-Cycle.

Lithium-ion battery recycler Li-Cycle saw revenue fall 32% in the fourth quarter due to falling metal prices, ahead of its center in Rochester, New York, which is set to open in late 2023.

Li-Cycle generated $3.5 million in revenue from product sales and recycling services in the three months to the end of its fiscal year, Oct. 31, 2022. That was down 14.6% from $4.1 million in the same period last year, which the company attributed to lower metal prices, primarily cobalt.

Those figures exclude what the company called the "impact of a $0.5 million non-cash fair market value (FMV) pricing adjustment related to the period-end metal price of a large black mass sale in the prior period."

Including the impact of FMV, quarterly revenue decreased 31.8% year-over-year, from $4.4 million to $3.0 million. The unfavorable FMV price adjustment was $0.5 million, compared to a “favorable” FMV price adjustment of $0.3 million in the fourth quarter of last year.

Cobalt prices fell 11.5%, from $60,407/t at the end of the fourth quarter of 2021 to $53,462/t in the fourth quarter of 2022. Nickel was relatively stable.

Those two factors offset higher sales of black mass, the metal-rich product produced in the first stage of recycling lithium-ion batteries.

Revenue for the full fiscal year was still up significantly, increasing 140% year-over-year to $15.6 million excluding FMV effects and 83% year-over-year to $13.4 million including FMV effects.

The company uses a hub-and-spoke model. Four operating “spoke” recycling facilities in Arizona, Alabama, New York and Ontario turn battery packs into black scrap, which is then sold on the market. It has also built “spokes” in Germany and Norway.

Some of the ferrous waste will be sent to separate the individual metals once a planned large-scale “hub” recycling facility opens in Rochester later this year. By 2024, the majority of the ferrous material will be sent there.

A site layout of the company's Rochester Center facility, where all ferrous materials will eventually be sent for processing. Image: Li-Cycle.

The company's targeted investment budget for the Rochester center is $486 million.

By the end of 2023, the facilities’ combined recycling capacity will reach 80,000 tonnes of lithium-ion battery material input per year, up from the current capacity of just over 50,000 tonnes.

As Li-Cycle continues to expand its operations in North America and Europe, operating expenses doubled to $39.4 million in the fourth quarter, resulting in a net loss of $33.9 million for the quarter. Last year's fourth quarter net loss included non-cash losses related to the SPAC listing, so comparisons are not meaningful.

The company ended its last fiscal year with $578.3 million in cash, down 11% from the previous quarter.

(Source: Li-Cycle Global Energy Storage Network, New Energy Network Comprehensive)