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Li-Cycle Holdings Corp. (LICY-N) showed progress on its cost cutting measures in Q2, while also announcing the closure of its Kingston, Ont. battery recycling facility to focus on other parts of its global recycling network.
Revenue in the quarter stood at $8.4 million (all figures US unless noted), rising 133 per cent from $3.6 million the year prior. Net loss in Q2 was $8.2 million, compared to $31.9 million in Q2 2023, driven by decreases in selling, general and administrative (SG&A) expenses and other expenses.
Headquartered in Toronto, battery recycler Li-Cycle has faced financial troubles that led to its laying off of 17 per cent of its workforce in 2023 and pausing construction on its facility in Rochester, N.Y.
The Kingston site was the company’s first commercial recycling site where batteries were shredded, called a Spoke. Operations were paused in November 2023, with Li-Cycle laying off 30 employees.
The pause followed an internal review to find efficiencies, Global News reported.
Li-Cycle also gave an update on the status of its $375-million loan from the U.S. Department of Energy (DoE) and the state of its Rochester Hub.
“Despite the recent challenges we are seeing in the battery supply chain, the longer-term fundamentals for the industry remain clear for recycling,” Ajay Kochhar, Li-Cycle’s president and CEO, said in an investor call Thursday morning.
Li-Cycle’s efficiency plan
Li-Cycle saw reductions in expenses, such as cutting SG&A by 39 per cent to $15.3 million in Q2, largely due to reducing recurring personnel costs.
The company is reviewing and optimizing its Spoke and Hub network, Kochhar said in the call, such as maximizing electric vehicle battery pack and module processing at its Spokes in Arizona, Alabama and Germany that can process full battery packs without the need for dismantling.
The Ontario Spoke is being transitioned from pause to closure. The company did not explain why the decision was made in the call.
Its planned Portovesme Hub project in Sardinia, Italy is paused, as are its plans for facilities in France and Norway. The line 2 expansion at its German Spoke has been deferred.
Progressing in Rochester, working on its DoE loan
Li-Cycle continued its comprehensive review of its Rochester Hub. Called a “cornerstone asset” by Kochhar, it is designed to process up to 35,000 tonnes of recycled battery materials per year. But rising costs put a damper on its plans, and the company received $75 million in investment from mining giant Glencore to sustain the project.
A loan from the DoE, called a “top priority” by Kochhar, would financially support the Rochester Hub. Li-Cycle says it is on the financial close stage of the loan process, working on technical, financial and legal parts of the agreement. An expected date for the closing of the loan could not be given by Kochhar.
For its plan to produce battery-grade lithium carbonate and a mix of nickel, cobalt and manganese called MHP, the company is also moving forward, Kochhar said. A cost estimate of the Rochester Hub with the MHP scope was pegged at $960 million, similar to previous estimates, he added.
Li-Cycle remains focused on ways to increase its near-term liquidity, its CEO said. As of June 30, Li-Cycle held $57 million in cash and cash equivalents, compared to $109.1 million at March 31.
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