Livium’s lithium-ion battery volumes hit a new high as recycling momentum builds

Battery collections reach a new operating high

Livium Ltd (ASX:LIT) has started FY27 with a sharp improvement in battery recycling activity, collecting 248 tonnes during the September quarter, including 226 tonnes of lithium-ion batteries. The lithium-ion figure exceeded every individual quarter of FY26 and helped lift battery recycling revenue to A$1.84 million, up from A$1.47 million in the prior corresponding period.

Gross profit rose to A$0.95 million from A$0.74 million, while the gross margin improved to 52% from 50%. The result came as the company commissioned its dedicated Sell & Parker processing plant, with battery-embedded devices under that contract accounting for 134 tonnes during the quarter. Livium said higher volumes under the agreement are expected to continue into the December quarter. The earlier Sell & Parker volume ramp-up had already pushed first two-month FY27 lithium-ion collections beyond every FY26 quarter.

Revenue growth is improving, but cash remains the test

The operating numbers are moving in the right direction, although the cash conversion picture is less comfortable. Envirostream generated A$1.389 million in customer receipts during the quarter but recorded net operating cash outflow of A$1.011 million after payments for staff, operating costs, research and development, administration and finance costs.

Livium ended September with A$3.254 million in cash and no listed financing facility drawn. On the Appendix 4C calculation, that represented 3.22 quarters of funding at the quarter’s operating cash outflow. The company’s stated objective is to move towards cash neutrality through cost discipline, higher recycling revenue and reduced spending on VSPC, making the next few quarters important for determining whether stronger volumes translate into a less cash-intensive business.

Funding and fire settlement strengthen the balance sheet

Livium also improved its near-term funding position through A$1.575 million of initial gross funding from The Lind Partners and a A$794,280 share purchase plan. The capital activity issued 96.9 million new shares under the SPP, while the Lind arrangements carry potential funding capacity of up to A$11.75 million. The SPP followed the July Lind funding package, which was presented as support for recycling growth, adjacent opportunities, VSPC and working capital.

A separate accounting benefit came from the settlement of five claims linked to the January 2019 Envirostream fire. Livium released its A$5.465 million fire-related provision, producing a non-cash benefit before tax and reducing the provision to nil. The insurer indemnified Envirostream for the settled claims, so Livium reported no settlement cash outflow. The Envirostream fire claims settlement had previously been reported as leaving the company with no remaining fire-related provision, but the quarterly report now records the release in the FY27 result.

VSPC negotiations approach a November decision point

Livium’s most consequential unresolved issue sits outside its core recycling operation. Discussions with a large multinational industrial organisation have advanced to negotiations towards a phased joint development agreement covering larger-scale manufacturing and cell-level performance of VSPC’s lithium iron phosphate cathode materials.

The proposal remains non-binding and depends on due diligence, agreed terms, definitive documents and approvals. Livium expects the current strategic process to conclude during November. If it does not produce a binding transaction, the company says it will begin an orderly shutdown of VSPC’s current operations and move the business to care and maintenance. Meanwhile, Sumitomo black mass discussions, the Solreborn solar panel recycling trial and rare earth testwork remain development-stage opportunities rather than contracted revenue streams.