The specialty metals and materials company reports solid results for the first quarter.
Despite a challenging market environment for rare earths, Canadian-based Neo Performance Materials reported substantial results for the first quarter 2024. The company focused on metals, alloys, and other special materials, posted a $10.8 million adjusted EBITDA for the first quarter compared to $0.8 million in the same period last year. Despite declining revenue from $135.5 million in the first quarter of 2023 to $128.7 million in the first quarter of 2024, Neo is confident in reaching double-digit adjusted EBITDA growth in the full year. The company cited the strong performance of its rare metals business unit, which comprises tantalum, niobium, rhenium, hafnium, gallium, and indium, as a primary factor for the successful quarter. In contrast, the revenue of Magnequench, Neo’s rare earth magnet business unit, declined due to soft demand in the magnetic powder business, even though traction motor volumes experienced a recovery recently.
Key developments during the quarter include closing its light rare earth separation facility in Zibo, China, in April to divest from low-return investments and positive initial results from the 2023 finalized closure of midstream niobium and tantalum operations in its separation plant in Sillamäe, Estonia. In addition, earlier this month, Neo signed a Memorandum of Understanding with Australian-based Meteoric Resources for the offtake of rare earth raw material from Meteoric’s Caldeira project in Minas Gerais, Brazil. The material will be separated in Neo’s separation facility in Estonia, which will supply the permanent magnet manufacturing plant currently under development nearby. The company said the facility is about halfway into construction and within the original budget.
Photo: iStock/Nordroden
