AMG Critical Materials has demonstrated robust growth in returns on capital employed, climbing to 11% over the trailing twelve months amid a 51% increase in capital base over five years. Strong performances in technologies and antimony segments drive this momentum, offsetting challenges in lithium and vanadium pricing, with adjusted EBITDA projected to exceed $200 million for 2025.
AMG’s Path to Enhanced Capital Efficiency
AMG Critical Materials continues to showcase impressive strides in optimizing its capital deployment, with return on capital employed reaching 11% based on the latest trailing twelve-month figures. This metric, calculated as earnings before interest and tax divided by total assets minus current liabilities, highlights the company’s ability to generate stronger profits from its invested resources. Over the past five years, ROCE has steadily improved from lower levels, reflecting efficient reinvestment strategies that have expanded the capital base by more than half.
In the third quarter of 2025, ROCE stood at 14.4%, a significant jump from 7.4% in the same period the previous year. This uptick underscores AMG’s operational resilience, particularly in its technologies division, where adjusted EBITDA more than doubled year-over-year. The antimony business also contributed solidly, benefiting from stable demand and technological leadership in flame retardants and other applications.
Financially, the company reported adjusted EBITDA of $64 million for the third quarter, marking a 58% increase from the prior year. This growth was fueled by higher revenues in key segments, with overall quarterly revenue climbing amid strategic expansions. For the second quarter, adjusted EBITDA hit $71 million, up 79% from 2024, driven by a 20% revenue rise to $439 million. These results have prompted management to raise full-year EBITDA guidance to at least $200 million, signaling confidence in sustained profitability.
Despite headwinds in commodity prices, AMG’s diversified portfolio in critical materials positions it well for long-term gains. The lithium segment faced a 33% revenue drop in the third quarter due to softer market conditions and logistical issues impacting tantalum sales, yet the company’s multi-material approach mitigates risks. Vanadium operations similarly contend with pricing pressures, but investments in recycling and advanced processing technologies are expected to bolster margins.
Capital expenditures for 2025 are projected between $75 million and $100 million, focusing on efficiency enhancements and capacity builds without straining the balance sheet. Net debt closed the third quarter at $544 million, with total liquidity at $419 million, providing ample flexibility for growth initiatives. This prudent financial management supports ongoing ROCE expansion, as AMG leverages its expertise in metallurgy to meet rising demand for sustainable materials in aerospace, energy storage, and electronics.
Looking ahead, AMG’s emphasis on innovation, such as potential new facilities for antimony processing in strategic markets, aligns with global shifts toward supply chain security. By reinvesting in high-return projects, the company aims to compound its capital efficiency, delivering value through consistent earnings growth and operational excellence.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, investment recommendations, or endorsements. Readers should conduct their own research and consult professionals before making decisions. All data and opinions are based on publicly available information.