Li-Cycle reports 2024 financials

Lithium-ion battery recycler Li-Cycle Holdings Corp., Toronto, has announced its financial results for the 2024 fiscal year and reports earning $28 million in revenue, up 53 percent from $18.3 million in 2023.

Additionally, the company reports a 13 percent decrease in total expenses year over year, primarily due to its cash preservation initiatives such as lower in-office and administrative expenses, a decrease in personnel costs driven by restructuring activities occurring in the fourth quarter of 2023 and throughout 2024 and lower share-based compensation, marketing, professional and legal fees.

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“In 2024, we advanced key priorities for the company, including closing our $475 million loan facility with the U.S. Department of Energy to help finance our Rochester Hub project and advancing optimization initiatives at our Spoke business,” says Li-Cycle President and CEO Ajay Kochhar. “We believe we are well positioned to support, and are aligned with, the energy priorities of the U.S. government as they look to bolster and onshore the energy supply chain through the domestic production of critical minerals. Looking ahead, we are focused on managing our cash position while considering our financial and strategic alternatives.”

Rapidly increasing construction costs led to a pause in Rochester, New York, in late-2023, and that project—estimated to cost nearly $1 billion to complete—remains stalled. In November 2024, Li-Cycle was able to close on a $475 million loan from the U.S. Department of Energy—a $100 million increase from the $375 the company originally was slated to receive—but will not receive those funds until construction of the Hub is finished.

Li-Cycle has said that a fully operational Rochester facility could produce up to approximately 8,250 tons of lithium carbonate and up to about 72,000 tons of mixed hydroxide precipitate (MHP), an intermediate product containing nickel, cobalt and manganese, per year under the trajectory outlined in an extensive project review the company conducted throughout 2024. The planned processing capacity at the facility was expected to be 35,000 tons of black mass per year.

The company recently formed a special committee to evaluate financial and strategic alternatives, and in its earnings report acknowledges receiving a letter from Switzerland-based Glencore Ltd., a longtime investor, March 14, expressing the global mining and metals conglomerate’s interest in a potential transaction involving Li-Cycle.

In March of last year, Glencore invested $75 million in Li-Cycle, which aided the battery recycler’s continuing operations amid its internal review. Among a number of conditions outlined by the companies at the time, Glencore was able to seat two additional nominees on Li-Cycle’s board of directors, giving it a total of three members. It was Glencore’s second investment in Li-Cycle, following a $200 million transaction in June 2022.

Last fall, the companies entered an agreement covering the offtake of 100 percent of the MHP that would be produced at Li-Cycle’s Rochester facility.

“The company can provide no assurance that it will enter into a strategic transaction with Glencore, on terms attractive to its shareholders and other stakeholders, or at all,” the company says in its report, adding that it requires additional financing to meet its obligations and repay its liabilities arising from the ordinary course of business operations when they become due in order to continue.

“The company is presently aware of no additional sources of financing to meet its obligations and repay its liabilities arising from the ordinary course of business,” it says.

Given its current financial position, the company says the terms of any strategic alternative may assign limited or no value to its existing equity. In the “Risk Factors” portion of its annual 10-K report for the fiscal year ended Dec. 31, 2024, filed with the U.S. Securities and Exchange Commission March 31 of this year, Li-Cycle states that if it is unable to obtain additional financing or enter into a strategic transaction, the company will need to significantly modify or terminate its operations and may need to dissolve and liquidate its assets under applicable bankruptcy laws or otherwise file for bankruptcy protection.

In February, Li-Cycle’s stock was delisted by the New York Stock Exchange after it fell below $1 per share for more than 30 straight days. The same month, the company received approval to trade on the OTCQX Best Market.

Revenue up, costs down

Li-Cycle says revenue from product sales and recycling services were $27.3 million, a 16 percent increase versus $23.6 million generated in 2023. The company says the increase primarily was attributable to increased recycling service revenue as a result of product mix and lower commodity prices. Its recycling service revenue more than doubles year over year to $11.9 million, driven by some new contracts.

The company reports its research and development costs decreased to $1.6 million versus $5.7 million in 2023, primarily due to a decrease in consulting and professional fees as a result of the pause in construction of its Rochester Hub facility and lower costs associated with a planned Portovesme Hub project in Italy. Also, the company’s capital expenditure declined to $23.9 million compared to $334.9 million in 2023, mainly because of the pause in Rochester and other development projects. Capital expenditures primarily consisted of payments for, and receipts of, equipment and construction materials purchased during previous periods for the Rochester Hub and a Spoke facility in Germany.

As of December 31, 2024, Li-Cycle reports it had cash and cash equivalents on hand of $22.6 million.

Li-Cycle operates U.S. Spoke facilities in Gilbert, Arizona, Tuscaloosa, Alabama, and Rochester, New York, though operations at the New York facility have been curtailed. The company also operates a Spoke in Germany’s Magdeburg region and has since paused the timeline on a proposed Spoke in Norway.

Under Li-Cycle’s business model, end-of-life batteries are processed into black mass at a Spoke site, then the black mass is turned into battery-grade materials at a Hub site.