Albemarle Corporation (NYSE:ALB) Q2 2019 Earnings Conference Call Transcript
Aug 08, 2019 • 09:00 am ET
Good day, ladies and gentlemen, and welcome to the Albemarle Corporation Second Quarter 2019 Earnings Conference Call.
[Operator Instructions] I would now like to introduce your host for today's conference, Mr. Dave Ryan, Vice President of Corporate Strategy and Investor Relations. You may begin.
Thank you and welcome to Albemarle's second quarter 2019 earnings conference call. Our earnings were released after the close of the market yesterday and you will find our press release, earnings presentation, and non-GAAP reconciliations posted on our website under the Investors section at www.albemarle.com. Joining me on the call today are Luke Kissam, Chief Executive Officer; Scott Tozier, Chief Financial Officer; Raphael Crawford, President, Catalysts; Netha Johnson, President, Bromine Specialties; and Eric Norris, President, Lithium.
As a reminder, some of the statements made during this conference call about our outlook, expected company performance, planned joint ventures as well as lithium production capacity end demand may constitute forward-looking statements within the meaning of Federal Securities Laws. Please note the cautionary language about forward-looking statements contained in our press release. That same language applies to this call. Please also note that our comments today regarding our financial results exclude non-operating, non-recurring, and other unusual items. GAAP financial measures and reconciliations from those to the adjusted numbers discussed today may be found in our press release and the appendix of our earnings presentation, both of which are posted on our website.
Now, I will turn the call over to Luke.
Hey. Thanks, Dave. Good morning, everybody, and thanks for joining us on the call today. In the second quarter, excluding currency impacts -- excuse me, Albemarle grew revenue and adjusted EBITDA by 6% and adjusted diluted EPS by 20% compared to the second quarter of 2018. Volume and pricing contributed to the year-over-year growth in lithium and bromine, while pricing was up year-over-year in catalysts. Scott will go into more detail on our quarterly performance and outlook for the rest of the year in a minute. I want to focus my comments on why we are adjusting our lithium capital expansion plans to significantly reduce capital expenditures in the medium term. The potential impact of EV subsidy changes in China, possible shifts in cathode chemistry, excess inventory held in spots along the supply chain, and the current oversupply of lithium carbonate in the market has caused some caution in the energy storage value chain.
All of this has put downward pressure on price and we expect to see this pressure on carbonate pricing continue in the near term, but we also expect supply demand dynamics to tighten in 2020. We have always stated that we would add production capacity to meet demand. As you can see on Page 8 of our earnings presentation, Albemarle has decided to delay all work related to planning, engineering, and construction of approximately 125,000 metric tons of previously announced additional conversion capacity. We anticipate that these changes will reduce our capital expenditures by approximately $1.5 billion over the next five years and allow Albemarle