Albemarle Reports Fourth Quarter and Full-Year 2025 Performance
Albemarle Corporation (NYSE: ALB), a global provider of essential materials supporting mobility, energy, connectivity, and health, announced financial results for the fourth quarter and full year ending December 31, 2025. The company delivered strong year-over-year sales growth, meaningful cost improvements, and solid operating cash flow despite dynamic market conditions, while positioning itself for improved lithium market fundamentals heading into 2026.
Key Highlights From Fourth Quarter and Full-Year 2025
Fourth-quarter net sales reached $1.4 billion, representing a 16% increase compared with the prior-year period. Sales volume rose 12%, with growth across all operating segments, led by Energy Storage (+17%) and Ketjen (+13%).
Despite higher sales, Albemarle reported a net loss of $414 million, or $3.87 per diluted share, primarily due to tax-related impacts and asset write-downs tied to the anticipated Ketjen transaction. On an adjusted basis, diluted loss per share improved to $0.53.
Adjusted EBITDA for the quarter totaled $269 million, up 7% year over year, driven mainly by strong performance in Energy Storage and Ketjen.
For the full year, operating cash flow reached $1.3 billion, exceeding 100% conversion of adjusted EBITDA, supported by productivity gains, disciplined working-capital management, and a customer prepayment received early in 2025. Free cash flow totaled $692 million, reflecting robust operating performance and sharply reduced capital expenditures of $590 million, down 65% from the prior year.
Albemarle achieved approximately $450 million in cost and productivity improvements, surpassing its original target range of $300–$400 million. Strategic portfolio actions also progressed, including the January 2026 sale of a 50% stake in the Eurecat joint venture for $123 million and plans to close the sale of a controlling interest in Ketjen during the first quarter of 2026.
Leadership Commentary
Chairman and CEO Kent Masters highlighted execution discipline amid shifting market conditions. He noted that double-digit fourth-quarter sales growth, strong full-year cash flow, and substantial productivity gains demonstrate the company’s progress in strengthening competitiveness. Actions to optimize the asset portfolio, reduce costs, and enhance financial flexibility are expected to support long-term growth, particularly as lithium market conditions improve.
Fourth Quarter 2025 Financial Overview
Quarterly net sales rose to $1.428 billion, compared with $1.232 billion in the fourth quarter of 2024. The increase was driven largely by higher Energy Storage and Ketjen volumes, along with improved Energy Storage pricing.
Net loss attributable to Albemarle widened significantly year over year due to one-time tax items and asset impairments associated with the pending Ketjen transaction. Excluding these factors, adjusted results showed improvement compared with the prior year.
Adjusted EBITDA increased by $18 million, reflecting pricing strength in Energy Storage and stronger Ketjen volumes.
The effective income tax rate for the quarter was (55.2%), versus 13.8% in the prior-year period. On an adjusted basis, tax rates rose sharply because Albemarle recorded a valuation allowance on U.S. deferred tax assets and experienced geographic income mix shifts, including impacts from previously recorded valuation allowances in Australia and China.
Segment Performance
Energy Storage
Energy Storage generated $759 million in quarterly net sales, a 23% increase year over year, driven by 17% higher volumes and 6% pricing improvement. Adjusted EBITDA climbed to $167 million, up 25%, supported by pricing strength and productivity initiatives.
For the full year, Energy Storage adjusted EBITDA reached $697 million, declining 8% from 2024 as lower lithium prices offset higher volumes and efficiency gains.
Specialties
Specialties reported $349 million in fourth-quarter net sales, up 5% from the prior year due to modest gains in both volume and pricing. However, adjusted EBITDA fell to $69 million, down 6%, primarily because of margin compression in lithium specialties compared with elevated 2024 levels.
Full-year adjusted EBITDA for Specialties totaled $276 million, representing a 21% increase, as productivity improvements and higher volumes outweighed pricing pressure.
Ketjen
Ketjen delivered $320 million in quarterly net sales, a 14% increase year over year, driven by stronger fluidized catalytic cracking volumes and favorable timing of Clean Fuels Technology sales. Adjusted EBITDA rose to $50 million, up 39%, reflecting improved product mix and reduced input costs.
For the full year, Ketjen generated $150 million in adjusted EBITDA, an increase of 15%, primarily from higher catalytic cracking volumes.
2026 Outlook and Market Scenarios
Albemarle introduced scenario-based guidance for 2026 tied to lithium price assumptions. These scenarios reflect recently observed improvements in lithium market conditions and expected operational performance.
If lithium prices average near $10/kg, projected net sales range from $4.1 to $4.3 billion with adjusted EBITDA between $0.9 and $1.0 billion.
At approximately $20/kg, expected net sales rise to $5.7–$6.0 billion and adjusted EBITDA to $2.4–$2.6 billion.
Under stronger pricing near $30/kg, Albemarle forecasts $7.5–$7.8 billion in sales and $4.2–$4.4 billion in adjusted EBITDA.
Energy Storage production volumes are expected to increase year over year, while sales volumes may remain roughly flat following inventory reductions during 2025. Long-term contracts covering about 40% of salt volumes are assumed to maintain flat pricing across scenarios. Capital expenditures for 2026 are expected to remain approximately unchanged, reflecting sustaining capital needs, the Ketjen divestiture, and targeted investments in productivity and resource development. Higher lithium prices could support meaningful free cash flow generation.
Segment Outlook for 2026
Energy Storage
Under the same lithium price scenarios, Energy Storage net sales could range from $2.5 billion to $6.1 billion, with adjusted EBITDA spanning $0.7 billion to $4.1 billion. Equity income from unconsolidated investments is projected between $0.2 billion and $1.1 billion, depending on market pricing.
Specialties
The Specialties outlook anticipates modest volume growth in semiconductor and pharmaceutical markets, partially offset by softer demand in automotive, construction, and oil and gas. Net sales are expected to be flat to slightly lower, and adjusted EBITDA may decline due to reduced lithium specialty pricing and weaker clear brine fluid demand.
Production in 2026 will also reflect the impact of severe flooding at the Jordan Bromine Company joint venture in January 2026, although operations have since returned to full capacity.
SOURCE LINK: https://www.albemarle.com/
